SIPPs & SSASs

SIPP (Self Invested Personal Pension Scheme) or SSAS (Small Self Administered Scheme) are becoming increasingly popular and commercial property is often acquired by a SIPP or SSAS

What exactly are they?

SSAS

A SSAS is a small occupational pension scheme that is set up by the directors of a business that want more control over the investment decisions relating to their pensions and in particular, to use their pension plans to invest in the business. As such, each member of the SSAS is usually a trustee.

The following are features of a SSAS:

  • occupational pension scheme, 
  • members are usually employees or directors of the sponsoring employer, 
  • there is no limit on the number of members but, as the name suggests, these schemes tend to be relatively small, 
  • Each member has a notional share of the SSAS funds including non-insured assets such as property and possibly insured money held in a trustee investment plan.

SIPP

A SIPP is a personal pension plan set up by an insurance company or specialist SIPP operator where the member has greater control over the investments. Anyone can take out a SIPP providing they meet the provider's eligibility requirements. These are usually based on a minimum fund size because of the higher costs involved in running a SIPP compared to a standard personal pension. Other features include:

  • personal pension plan, 
  • the option to invest in both non-insured assets such as unit trusts and property and insured assets such as a trustee investment plan, 
  • Member's employer can contribute to the pension plan and may operate payroll deduction on the member's behalf. 
     

SSAS versus SIPP

What's the difference between a Small Self-Administered Scheme (SSAS) and a Self-Invested Personal Pension (SIPP)? Well, not as much as you may think. They're both regulated in the same way and in the eyes of HM Revenue and Customs (HMRC); they're both investment regulated pension schemes, which means that the basic rules surrounding borrowing, lending and investment are exactly the same for both.

So does that mean we can forget all about the distinctions between the two? Well, unfortunately no.

A SSAS has more flexibility than a SIPP when it comes to investment. This is because current legislation allows investments to be made in the sponsoring employer. A SIPP doesn't have a sponsoring employer (although any employer can contribute to it) but a SSAS does. This, therefore, allows the SSAS to invest in the company. Let's have a closer look at the investment differences between a SSAS and a SIPP:

 

 SSAS SIPP
SSAS can lend money to sponsoring employers. Loans are not allowed to any members or any person/company connected to the member. Any such loan made by a SIPP would be an unauthorised payment.
Can invest up to 5% of the fund value in the shares of the sponsoring company. A SIPP doesn't have a sponsoring employer so can theoretically invest up to 100% of the fund in the shares of any company, including one run by the member.
Can buy shares in more than one sponsoring employer so long as the total market value at the time the shares are bought is less than 20% of the total value of the scheme. If the company involved is controlled by the SIPP member or an associated person, investment in that company would be regarded as investing in taxable property.
SSAS can potentially own 100% of a company's shares so long as the value doesn't exceed 5% of the value of the SSAS. A SIPP can potentially own 100% of a company's shares so long as the company is not controlled by the member, and this is acceptable to the SIPP provider.

 

If either a SSAS or a SIPP directly or indirectly acquires taxable property, an unauthorised tax payment on the member will apply. In addition, the scheme administrator will be liable to a scheme sanction charge both on income from the taxable assets and capital gains on their disposal. This effectively means that it's not possible for SIPPs to invest in a company controlled by a member as virtually every purchase made by that company would be an unauthorised payment
 
Our specialist commercial property solicitors have extensive experience in dealing with both the business owner and pension providers in the acquisition and disposal of commercial property and can work on a fixed fee basis.

Contact Us

For further advice on SSAS & SIPPs, contact our team of expert solicitors today on 0800 083 0815 or fill out an online contact form. 

What Our Clients Say

Many thanks to Shefali for her hard work in making our move go well. Thank you.

Mr & Mrs Scott

Made what could have been a difficult matter, easy, fast and in a very friendly manner.

Mr Gillett

An excellent service highly recommended. Can't thank Miss Talukdar enough for her help and personal attention to our move.

Mr Webster

Thank you for dealing with our house sale in such a courteous and speedy manner.

Mr & Mrs Beetson

Very professional. Kept us up to date at all times. Miss Talukdar was extremely helpful and kept us updated when there were any problems.

Mr & Mrs Fitton

I received excellent service throughout the process, including being offered invaluable advice. I would recommend Clough & Willis to others.

Ms Lone

The efficiency of your service had much to do with the successful sale of our property. Your extensive knowledge meant the quick resolution of one potential stumbling point. We were very happy.

Ms Georghiou

Legal difficulties were overcome to enable us to complete both our sale and purchase. Without Clough & Willis advice and assured professionalism we would have floundered.

Client Satisfaction Comment

Shefali was first class I can't speak highly enough of her.

Mr Smith

We found Lorraine to be very understanding and dealt with us very professionally going the extra miles whilst we were out of the UK.

Ms Park-Wesley

Very happy with Lorraine and her team. They kept us informed at all times and advised us appropriately. We felt really valued as clients and would be happy to recommend Clough & Willis to family and friends.

Mr & Mrs Lloyd

Everyone I dealt with was polite and efficient. Emails and phone calls were replied to quickly. Made a good impression on me I would certainly recommend Lorraine to other would be sellers.

Ms Rhodes

I have been thoroughly impressed with Lorraine’s attention to details, which has ensured my interests have been looked after and protected. Lorraine is a professional, efficient and friendly partner at Clough & Willis and a true credit to the firm.

Mr Willis

Lorraine Stratton-Webb dealt with me in a professional manner, she kept me informed and made the move more easy than I had envisaged.

Ms Crowshaw

I have complete faith in your company and all of the staff. I have been confidently aware that you do the job in hand and keep me updated along the way. I have never had to chase up anything at all from any members of your team - you just do it regardless! Very refreshing. Thank you.

Ms Hawly

We found Clough & Willis experienced as to put us at ease during our house sale and purchase which is stressful most of the time, so it’s good to have a firm like Clough & Willis to support you through it from start to finish.

Mr & Mrs Tate

Lorraine Stratton-Webb – “Strength in the face of adversity” - 4 days after I thought I would lose the house of my dreams she completed the purchase. Thank You.

Ms Dix

Thanks for a very professional approach during my house purchase. Buying for my first house I had complete faith in Lorraine Stratton-Webb leaving no stone unturned during property searches.

Mr Jones

I would have no hesitation in using Clough & Willis; the team offered a very fast and efficient service and I am delighted with the service received. Thank you very much to Lorraine and her team for another fast and trouble free turn around.

Ms Whitter

Outstanding Service.

Ms McKenzie

Thank you for your help and patience in this matter.

JSM Estates

Read all testimonials