ssas loanbacks limited company directors powerpoint april 2012
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Limited Company Directors: Difficulty Borrowing from the Banks? Borrow up to 50% of the fund from your Pension!An answer may lie in the SSAS loanback facilityUp to 50% of the SSAS fund can be lent to the sponsoring employerTransfer of Protected Rights into your SSASThe removal of Protected Rights benefits from this tax year will allow business owners to transfer funds into their SSAS pensions in order to increase funds to improve the borrowing capabilities for property purchase, as well as loanbacks for capital purchaseTRANSCRIPT
SSAS Loanback Facility
Difficulty Borrowing from the Banks?
Borrow up to 50% of the fund from your Pension!
Transfer of Protected Rights into your SSAS
Chartwell Financial Services
How can we help?
Limited Company Directors: Difficulty Borrowing from the
Banks? Borrow up to 50% of the fund from your Pension!
In last year’s autumn statement the chancellor
announced his intention to expand credit lending
facilities for small businesses and this was confirmed with
the launch of the £20 billion National Loan Guarantee
Scheme, aimed at small-to-medium-sized businesses with a turnover of less than £50 million
However in 2012, there appears to be little appetite
from the banks to take any further risk at this time, without
very high levels of security, up front administration
charges and interest rates that far exceed the Bank of
England’s standpoint at this time
An answer may lie in the SSAS loanback facility
SSAS Loanback Facility
Difficulty Borrowing from the Banks?
Borrow up to 50% of the fund from your Pension!
Transfer of Protected Rights into your SSAS
Chartwell Financial Services
How can we help?
SSAS Loanback Facility
Up to 50% of the SSAS fund can be lent to the
sponsoring employer; a feature not available to SIPPs
Business clients, whose banks are unwilling to lend,
could borrow from their own pension pot by
converting their existing personal pensions or SIPP’s
into a SSAS. A SSAS can lend a maximum of 50% of its
net assets, with interest rates of 1.5% or a maximum
term of up to five years (there must be a minimum
rate of base rate plus 1%)
Consider a situation where four company directors
each have their own SIPP worth £500,000. If instead
they had a SSAS, under which they are all members
and trustees, having a total value of £2m, they could
make available a £1m loan to their company
SSAS Loanback Facility
Difficulty Borrowing from the Banks?
Borrow up to 50% of the fund from your Pension!
Transfer of Protected Rights into your SSAS
Chartwell Financial Services
How can we help?
SSAS Loanback Facility
What’s more the loan interest, which is an
allowable business expense for tax purposes, is paid
back into their own pension rather than to a bank.
They could also choose to set a higher rate to give a
better return on their investment
There must be a first charge over an asset which is
equal in value to the loan, plus interest. The
loanback is only available for the company of
director-owned businesses
Although an attraction of SSAS is that it can make
a loanback to the sponsoring employer it must satisfy
the 5 key tests that must be met for the loan to be
classed as an authorised payment, including;
security, interest rates, term of loan, maximum
amount of loan & repayment terms. Otherwise, an
unauthorised payment charge may apply on the full
value of the loan
SSAS Loanback Facility
Difficulty Borrowing from the Banks?
Borrow up to 50% of the fund from your Pension!
Transfer of Protected Rights into your SSAS
Chartwell Financial Services
How can we help?
Transfer of Protected Rights into your SSAS
Recent rule changes enabling SSAS to hold
Protected Rights has removed a previous barrier to
some trustee member’s ability to benefit from the
advantages of SSAS’s and creates new opportunities
for them
The removal of Protected Rights benefits from this
tax year will allow business owners to transfer funds
into their SSAS pensions in order to increase funds to
improve the borrowing capabilities for property
purchase, as well as loanbacks for capital purchase
Where SSAS owners have already borrowed
against property assets, the new funds can be used
to repay or reduce the existing borrowing. The SSAS
pays less bank interest with rental income accruing
within the SSAS, creating the opportunity for further
investment
Chartwell & Lindley Trustees: part of The
Lindley Group
• One of the premier financial services groups in the
North West
• 100% owned by its shareholding directors
• Specialists in pensions & retirement planning for both
individual and corporate clients
• Lindley Trustees have managed SSAS pensions for
directors since 1979 with over £150m of commercial
property under SSAS schemes
• Chartwell Wealth Management manages in excess of
£150m of assets on behalf of individuals, pension
schemes and Trusts
SSAS Loanback Facility
Difficulty Borrowing from the Banks?
Borrow up to 50% of the fund from your Pension!
Transfer of Protected Rights into your SSAS
Chartwell Financial Services
How can we help?
SSAS Loanback Facility
Difficulty Borrowing from the Banks?
Borrow up to 50% of the fund from your Pension!
Transfer of Protected Rights into your SSAS
Chartwell Financial Services
How can we help?
We look forward to
hearing from you
Contact:
Chartwell Financial
Services
Lindley Court
Scott Drive
Altrincham
Cheshire
WA15 8AB
T. 0161 929 3500
F. 0161 929 3501
W. www.chartwellfs.com
Chartwell Professionals and Chartwell Wealth Management are trading styles of Chartwell Financial Services Limited who is Authorised & Regulated by the Financial Services Authority. Registered in England 02578206