Up to 50% of the value of the scheme’s assets can be loaned to the business
The member trustees of a SSAS are entitled to grant a secured loan to the company from their scheme of up to 50% of the value of the scheme assets. All such loans made to the limited company must be prudent, justifiable and with the intention to assist the company in its trading activities.
A property purchase might be one such purpose – should it be the directors’ intention to purchase property in the name of the company rather than as trustees of the pension scheme.
All trustee loans must be both secured and carry a maximum repayment period of 5 years. An agreed loan repayment structure would necessarily be established at the outset – with the loan interest charged by the trustees carrying an acceptable market rate. In this way loan interest would accumulate within the SSAS – rather than exiting the business to a third-party lender’s benefit.
What next?
If you think a SSAS might be suitable for your pension needs, then contact our expert team for an initial chat.
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