Small Self-Administered Scheme
Business Continuity Planning
Planning and managing long-term business continuity can be a long difficult process. In many instances, a Rowanmoor Pensions SSAS can be a key part of an overall plan to move control and ownership of a business, whether it is to the employees or through the family generations.
Funds in a Rowanmoor Pensions Small Self-Administered Scheme (SSAS) are held under trust for the benefit of all the members of the scheme. Members have a right to a benefit from the scheme, but the assets do not belong to any particular member. This means that SSAS assets are less likely to have to be sold to pay benefits, such as death benefits, as the trustees are more likely to be able to use other assets or borrow to pay the benefits.
The following example helps to illustrate this feature:
Charles has a Rowanmoor Pensions SSAS, the major asset being a commercial property, with a mortgage, used by the business. Charles, aged 56, has had a heart attack and has been advised to give up work. He wishes to retire, however, there is insufficient cash in the pension scheme to pay out his tax-free cash (pension commencement lump sum). He feels it is totally the wrong time to sell the property as this could cause considerable problems to the business. His son is keen to take on the role of Managing Director and his daughter-in-law would also like to be more involved in the business.
The son and his wife both have existing pension funds. After taking advice, they join the Rowanmoor Pensions SSAS and transfer their pension benefits in as cash. The scheme, being a single trust, now has sufficient cash to pay Charles his tax-free cash and pay the balance on the mortgage. Pension income for Charles will come from the rent being received from the property.
By widening the membership of the SSAS the assets can be shared and there is no requirement to sell the property.
This information relates to the Rowanmoor Pensions SSAS.