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Since the mid seventies company directors and other senior executives have been able to establish pension schemes, which give them control over their investment funds. Known as Small Self-Administered Schemes (SSAS), or self directed trusts.

These schemes continue to be the most flexible pension arrangements available. Schemes are established as Trusts and the members, the selected directors/senior employees, are the Trustees. In addition, it is a Revenue requirement that a Professional Trustee, known as a Pensioneer Trustee, is appointed.

The Trust Document and the Rules of the Scheme must be in accordance with Revenue requirements that additionally approve each Scheme and grant it “exempt approved status”. This confers substantial tax benefits on each scheme. The company makes contributions on behalf of the members. Contributions are treated as a trading expense, thereby attracting corporation tax relief. Unlike most pension arrangements there is no requirement to make regular contributions. This means the company may make contributions when profits and cash flow allow. 

The maximum contribution must be agreed in advance with the Revenue. Perhaps the greatest benefit to the scheme member is the ability to control investments. In addition to quoted equities, gilts, collective investments and cash deposits, allowable investments include land, commercial and residential property and investments in private companies. These can be located anywhere in the world. Some restrictions do apply to investments.

- No self-dealing. The scheme cannot buy, sell or let to the member, the company or related practice.

- No “pride in possession” investments

These would include tangible, moveable property such as fine art or vintage cars. There is no tax liability on the investments within the SSAS. The scheme is exempt from both income and capital gains tax. On retirement (from age 50) most SSAS members can access an approved retirement fund (ARF) which will allow them to receive 25% of the fund as immediate tax free cash. The remainder can be drawn down as taxable income or should be rolled up free from tax. On death the balance of the fund can be passed to the member’s next of kin subject to a maximum of 20% tax.

What Advantages does a SSAS have over Traditional Pensions? 

It allows significantly greater contributions than personal pensions and offers the individual personal choice in the type of asset to be invested in by the scheme. Unlike traditional insurance company pensions there are no financial penalties if you reduce your contribution or fail to make a contribution in any given year. Flexibility is a key component of SSASs both in terms of contributions and investment options. 

In terms of wealth management and exit planning the ability to transfer business profits to a personal trust and ultimately onward to the next generation in a tax efficient manner is a key factor

Our new website has just been launched and we hope to deliver information relating to all our activities here at APTI.
Featured Member
HC Financial
Oranmore Business Park, Oranmore, Galway
Tel: (091) 788 000


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