A Small Self-Administered Scheme (SSAS) is a business term for a pension trust set up by a limited company or a partnership. Most SSASs are created by privately held or family-owned businesses to benefit their owners, directors, and senior employees. Members of the scheme also serve as trustees, which gives them control over the scheme’s assets and investment options within a tax-efficient framework.
An individual with an SSAS pension, as opposed to a “standard” personal pension, can invest in a far wider variety of assets, one of which is commercial property. Because of this, you can use the funds provided by an insurance provider and create your retirement strategy.
Options for SSAS investment
When compared to standard pension arrangements, an SSAS plan enables a considerably more comprehensive variety of investment options to be chosen from. Here are some of them:
- Commercial Property
- Industrial / Retail Units
- Agricultural Land
- Commercial Land
- Gilts and Fixed Interest stocks
- Investment Trusts
Investing in Commercial Property
It is also one of the most common investment options opted for by individuals. The process of investing in commercial property through an SSAS is similar to investing in any other type of property. The main difference is that you are the legal owner of the property, and the money goes into a bank account linked to your pension system. Compared to more traditional pension plans, it offers directors of corporations several advantages, including financial security for their families in the long run. The pension trust offers enviable tax benefits throughout the inheritance phase, and your pension plan’s investing and development stages. Moreover, the Self-Administered Pension Plan (SSAS) is a separate legal entity. Unique in its flexibility, this choice allows you to invest according to predetermined guidelines while still enjoying the tax benefits associated with a pension.
Advantages of SSAS investment in Commercial Property
Many prefer property investments because of their stability in profits and security and because they are physical assets less vulnerable to fluctuations than stocks. The SSAS protects assets from creditors and doesn’t count them as part of the estate. This makes it almost certain that the assets will be passed on to the next generation.
An advantage of having an SSAS property pension is the ability to purchase and develop land and commercial property. This is a privilege that comes with having the SSAS property pension. This results in a wide range of favourable tax implications, including the following:
- Deductions or exemptions from taxes applicable to any contributions made to the SSAS to purchase commercial land or property
- If your firm pays rent to an SSAS, the rent can be written off as a business cost, which can lower your company’s effective rate of income tax and corporation tax.
- Within the SSAS property pension, any appreciation in the value of a commercial property is exempt from Capital Gains Tax.
When used as a pension, the SSAS is only permitted to make purchases of commercial property. Both freehold and leasehold properties are included in it. The HMRC considers properties such as offices, industrial units, warehouses, and business units to be examples of the category of property known as commercial. Other examples include stores, garages and car parks, agricultural land designated for development, forests, nursing homes, hotel buildings, and pubs.
How can NC REAL ESTATE help you invest in commercial property?
If you have an SSAS already and want to invest in Commercial or Mixed-Use property, we can help you. We can develop the most thoughtful strategy to build a portfolio with a team of surveyors in your pocket to guide you along the way. We can provide you with access to industry databases, actionable content and a roadmap to build a property portfolio that aligns with your goals. We can help you make strategic use of your SSAS and invest in the best commercial property by guiding you through the pros and cons of the deals we’ve found, with the chance to buy the ones that work for you. We would make sure that you stay on track and give you action steps to help you over hurdles.
Conclusion
The SSAS is remarkable in its power, flexibility, and distinctiveness. If you run a business, you should take advantage of the chance to improve your personal life and how your business works by learning how much a switch to an SSAS could help in those areas. With the SSAS pension plan, you have the opportunity to invest in property that, if handled well, may provide long-term security for your family members. In addition, the SSAS pension can continue to function for a significant amount of time after the members have passed away. It does this by placing assets in trust and continuing to pay benefits to the member’s dependents.
If you already have an SSAS and want to invest in Commercial or Mixed Use property, book a 1:1 call with Team NCRE here: https://go.oncehub.com/bonuscallteamncre Or email Lorenza at lorenza@ncrealestate.co.uk to find out more.
