A Small Self-Administered Scheme (SSAS) is a type of occupational pension scheme set up under trust for up to 12 members.

Costs of a SSAS

The costs of establishing and administering a SSAS are greater than those of an individual SIPP. But if three or more members are involved then the costs of a SSAS are likely to be lower and, as mentioned earlier, property transactions are significantly less expensive in a SSAS than in a group of SIPPs.

Other advantages

All SSASs are separately registered with HMRC and the fact that the members are trustees, working closely with the independent trustee, enables investment decisions to be taken that are appropriate to the membership, rather than the blanket approach to permissible investments offered by a number of SIPP operators. As well as being able to offer the full range of investments that may be held within a SIPP, a SSAS can also lend money either to a sponsoring employer or associated company, provided any such loan is secured on assets of equivalent value and is on fully commercial terms. A property held within the scheme and leased back to the company is a highly tax-efficient approach for a company occupying its premises.

Historically, a SSAS required a professional trustee known as a pensioneer trustee. This requirement has now been removed, although the majority of SSASs still employ the services of an independent trustee who is well versed in legislation and HM Revenue & Customs (HMRC) practice.

The choice of independent trustee is important because some will act as scheme administrator and protect the member trustees from falling foul of making unauthorised payments or breaching tax regulations, while some will not offer this additional service and let the responsibility rest on the shoulders of the member trustees.