SSAS Pension Problem

pe567567567

Briefly, I have a SSAS which was started years ago. I am now retired and the my company does not exist any more. There is a factory in the pension and  virtually no cash. The rent gets paid in monthly and amounts withdrawn to live on. The pension company does nothing, the little cash is in the bank they specify, and they charge over £3,000pa in fees. My question is can I change this pension to a different type or with a different trustee to save money, or preferably, can I just not have the pension at all any more, and look after my own tax on the rent of the factory.

Marcon

pe567567567 said:

Briefly, I have a SSAS which was started years ago. I am now retired and the my company does not exist any more. There is a factory in the pension and  virtually no cash. The rent gets paid in monthly and amounts withdrawn to live on. The pension company does nothing, the little cash is in the bank they specify, and they charge over £3,000pa in fees. My question is can I change this pension to a different type or with a different trustee to save money, or preferably, can I just not have the pension at all any more, and look after my own tax on the rent of the factory.

Who are the current trustees? What are the provisions in the rules of the scheme in relation to winding it up?

flaneurs_lobster

Are you the only member of the scheme (and a trustee) , with a professional trustee who is also the administrator?

poseidon1

pe567567567 said:

Briefly, I have a SSAS which was started years ago. I am now retired and the my company does not exist any more. There is a factory in the pension and  virtually no cash. The rent gets paid in monthly and amounts withdrawn to live on. The pension company does nothing, the little cash is in the bank they specify, and they charge over £3,000pa in fees. My question is can I change this pension to a different type or with a different trustee to save money, or preferably, can I just not have the pension at all any more, and look after my own tax on the rent of the factory.

In my view there is a far more fundamental question to ask yourself and that is whether this illiquid asset is a suitable basis for long term pension income. I would also be concerned about the lack of a substantial cash buffer ( or near cash), in the event the property becomes vacant with no replacement tenant in sight.

A SSAS by its nature is a more complex entity to administer and stay within HMRC guard rails compared to a SIPP so attracts higher professional fees as a result. Frankly I do not sense you have the competency to run it by yourself.

My suggestion is to seriously consider selling the factory ASAP and transfer the proceeds to a far more straight forward SIPP investing in conventional stocks and shares.

In passing you and all over SSAS owners of commercial property should be especially concerned about the forthcoming IHT regime in 2027 affecting all DC schemes

. Although I suspect property based SSAS will probably benefit from the 10 yearly instalment option to pay IHT bills, it defeats the whole point of the pension as a resource for the surviving family if the future income stream is wholly employed in servicing IHT plus interest thereon. Worse still the rental income could be entirely inadequate to service the eventual IHT bill.

Time to review if your current arrangement still makes fiscal sense.