Solutions for Business
Secured Employer Loans
One of the unique features of a SSAS is that it can make loans to the Sponsoring Employer or to any other Employer participating in the SSAS. This is mutually beneficial as the Employer can access funds to help develop the company and boost revenues, whilst topping up its own pension scheme through the interest rate charged.
All loans must be prudent, secure and on commercial terms but additional strict rules are laid down by HMRC for Employer loans. With our expert knowledge, Davies & Co will work closely with members and their professional advisers to ensure they do not fall foul of the rules and, therefore, avoid punitive tax charges.
As with all aspects of our SSASs, we are extremely vigilant in keeping the risk profile of all SSAS activities at a minimum. For all loans, we require that an independent specialist lawyer must undertake all associated legal work. The aim is to ensure that the SSAS does not enter into any loans where the security of the loan is in doubt and that the Trustees are suitably protected at all times.
SSAS funds can be used to secure a commercial place of trade for the Employer. Whilst the premises may be well suited to the business, the Trustees must consider the investment to be prudent and suited to the needs of the SSAS. In return, the Employer pays a commercial rate of rent to the SSAS and the SSAS benefits from any rise in capital value of the property.
It is possible for the SSAS to borrow funds from a commercial lender to assist with the property purchase. The Trustees must consider the level of borrowing in conjunction with the circumstances of the members, ensuring it is suitable and affordable.
At Davies & Co, we have extensive knowledge of property investment through SSASs. We will guide you through the purchase from start to finish, then support the ongoing successful management of the property.
In the interests of mitigating risk and protecting the members' benefits, we require that an independent specialist lawyer must act for the SSAS Trustees throughout the transaction and carry out all associated legal work.
Property should usually be classed as a long-term investment and form part of a balanced portfolio, taking into account the needs of members.
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