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whilst building up a substantial pension fund to bene?t them, and their family, in retirement. So, how could you as an entrepreneur use your SSAS’s funds to inject cash into your business? This can effectively be done by making a secured loan to the employer, known as a loanback. Loans can be used to buy, for example, ?xed assets, land for development or to increase stock and have to be repaid by regular capital and interest installments. Loans are restricted to a maximum of 50 of the net SSAS fund. Such loans must be secured against assets by way of a ?rst charge and the security must be suf?cient to cover the loan and interest on it. The maximum term permitted is ?ve years, with the interest being at least 1 above the average base-lending rate of the six leading high street banks. The bene?t to the company, is that the interest charged should be a tax deductible business expense, but will not be taxed when received back by the SSAS. We must also take into account that from a tax planning perspective, the capital that has been used to make the loan back would have already bene?ted from tax relief; in so much that contributions made into the scheme either by the member or the employer would have received tax relief at the highest marginal rate of tax that they pay. Loans may also be made to third parties but it is not possible to make loans to the member trustees or anyone connected to them. This means that a SSAS established by a self-employed business owner or partnership may not lend money back to their business. Loans to third parties are not restricted to 50 of the fund and need not be secured. Bene?ts of using a SSAS to purchase your business premises There are bene?ts that you, as an entrepreneur, will derive from using your SSAS funds to purchase your business premises and lease it back to the company. Obviously the SSAS commercial property purchase is not the only option available, and in some circumstances may not be best advice. For example, the trustees are allowed to make other investment decisions including stocks and shares, investment trusts, bank and building society deposits and even gold bullion. However, for the purposes of this article, when it comes to making a decision about purchasing commercial property the company has three options: • buy the property from after-tax pro?ts; • pay the directors bonusesdividends so that they can buy the property; • set up a SSAS for the directors and the SSAS buys the property. By investing in commercial property through a SSAS, the company can reduce its corporation tax bill, therefore improving cash ?ow for further potential investment in the business, the rent paid by the company to the pension scheme attracts corporation tax relief; the rent received by the pension scheme will be free from income tax; there will be no capital gains tax to pay when the property is sold by the pension scheme; as the property is an asset of the pension scheme it is protected from company creditors and last but not least there is scope for the pension scheme to invest capital back in the company through self-investment. Setting up an SSAS Decisions about how to invest will be jointly made by all members, however to ensure the scheme is individually tailored to meet your needs, you should seek the advice and support of an experienced, quali?ed pensions consultant and an administrator who can help you establish the parameters within which to run your scheme. The actual detail as to what can be done for your own company and objectives depends on many factors, including the ages of the controlling directors, their individual aims, their existing pension arrangements and the resources available to build the fund. However, don’t miss out on an opportunity to secure the economic future for yourself and your business – a SSAS could be just the vehicle to help you safeguard both. *Source: http:www.statistics.gov.uk downloadstheme_populationOcc-Pension -2008OPSS_Annual_Report_2008.pdf Joe Freire is an entrepreneur and owner of JMF Financial Services Ltd. JMF’s mission is “Wealth Creation and Wealth Preservation”. To meet their aim of helping high net worth individuals, businesses and business owners create wealth and then preserve that wealth for their own use and that of future generations, JMF have developed a programme which will be tailored to their client’s individual needs, SSAS’s are just part of the potential programme to help clients achieve these aims. 21