SSAS Pension Problem

pe567567567

Cash_Cow said:

£3000 seems an awful lot to admin one somewhat dormant SSAS - especially compared to what is charged for full on accounting costs for business/personal/spouse too.  I pay £1k for one SSAS property.  Follow the other suggestions here but you can transfer the SSAS to a better value provider im sure. There may be setup costs mind.

sounds more sensible, who are you with/

pe567567567

GDB2222 said:

I’m right out of the loop these days, so correct me if I am wrong about this, but I think the op can take the factory out of the pension fund in the form of a single giant instalment of pension. He will be charged income tax on that, so he will need to think about how to fund the tax. After that he will own the factory himself, and he can dispense with the trustee admin company. 

Or is that all banned as a transaction between the ssas and the member? 

The tax hit would be far too big to do that.

pe567567567

Cash_Cow said:

I would have thought you can sell the property but the ssas must receive the money. It doesn't care if it holds property or cash. If you then crystalise the pension you can take 25% and the rest at your marginal tax rate. Not a pro but thats my take 👍

Again, I don't want to sell the factory, we've had income from the rent paid into the scheme for years now and took our 25% a long time ago.

pe567567567

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

GDB2222

pe567567567 said:

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

You can't just take the factory out of the SSAS - at least not without paying tax, and you said "The tax hit would be far too big to do that". So, you need the SSAS wrapper.

You don't need an outside company to run it, but you said you don't want to run it on your own.

However, maybe you can find a cheaper company to help you run it?

Marcon

pe567567567 said:

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

Do you actually know what they do for their fees? For example, are they running the pension payroll?

poseidon1

pe567567567 said:

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

I take your point about the excellent income yield you are achieving, coupled with the new 7 year lease which ,depending on the strength of the covenant, makes for an attractive low admin investment ( I have a share of a commercial property myself).

Transferring it out is not an option,  for the reason you state, but is purchasing  it yourself at strict market value ( to avoid the unauthorised payment regime) a possibility?

This may mean getting a commercial mortgage so your net rental return would diminish, but with uninvested cash then held in the SSAS which you could transfer to a low cost SIPP, there is a decent chance of still achieving your current overall  net income via the combined personal rents and SIPP drawdown.  

You said you would be happy to run the rental and associated tax compliance yourself, would the initial hassle of a purchase by you, be worth the future cost savings ?

pe567567567

GDB2222 said:

pe567567567 said:

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

You can't just take the factory out of the SSAS - at least not without paying tax, and you said "The tax hit would be far too big to do that". So, you need the SSAS wrapper.

You don't need an outside company to run it, but you said you don't want to run it on your own.

However, maybe you can find a cheaper company to help you run it?

I would be happy to run the SSAS on my own to save fees, i need to find out what this entails first. 

pe567567567

Marcon said:

pe567567567 said:

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

Do you actually know what they do for their fees? For example, are they running the pension payroll?

Everything is charged extra, Payroll, one off payments etc etc etc.

Marcon

pe567567567 said:

GDB2222 said:

pe567567567 said:

What brought all this up again is that I've just signed another lease, 7years this time and I am thinking that during this time I will have to pay the SSAS company well over £21,000 for doing next to nothing.

You can't just take the factory out of the SSAS - at least not without paying tax, and you said "The tax hit would be far too big to do that". So, you need the SSAS wrapper.

You don't need an outside company to run it, but you said you don't want to run it on your own.

However, maybe you can find a cheaper company to help you run it?

I would be happy to run the SSAS on my own to save fees, i need to find out what this entails first. 

A SSAS is an occupational pension scheme (albeit a miniature one), with all the legislative requirements re reporting, tax etc etc. It's not a job for someone without the necessary knowledge, experience and training, however tempting it might be to think you could save money by going the DIY route. Maybe investigate changing to another company who might offer more competitive fees?