Five Reasons Commercial Property Should Be In A SSAS

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Over the past few years, there has been a lot of debate around the most advantageous way for a business owner to hold commercial property, with varying views about whether it’s better to register ownership of the property with the company or the business owner personally. However, there is also lesser-known third option which involves the business establishing a SSAS (Small Self Administered Scheme) and moving the property into it.
This is equally relevant whether a property is being purchased from a third party or if a business owner owns a commercial property that they wish to transfer into a SSAS. Property in a SSAS brings the following benefits:

A SSAS is a trust-based pension scheme. This means that should the business suffer financial difficulties in the future, creditors could not attempt to place a charge on any assets held in it. Although the majority of businesses owners think “that won’t happen to my business”, as events following the collapse of Lehman Brothers prove, we never know what’s round the corner. Asset protection surely has to be considered?
Capital Gains Tax
Under current pension legislation, when an asset is placed into a SSAS any future growth in value is then free from Capital Gains Tax. This can be particularly useful if the asset has latent growth potential, such as development land or commercial property that might be re-developed.
Inheritance Tax
When a member joins a SSAS they are asked to complete and maintain an up to date expression of wish form (similar to a will, but not legally binding). When they die, their assets within the SSAS are distributed at the descretion of the remaining Trustees. These trustees must take into account (amonst other things, for example surviving dependents) the deceased member’s expression of wish. Normally, the benefits are paid out of the SSAS to provide for dependents, but it is also possible for the SSAS to accept new members and have the assets distributed to them.
Following the recent changes to legislation, it is also possible for this to happen over and over again within the same SSAS. In practice, this makes the SSAS similar to a family trust whereby assets can pass down through the family without the worry of IHT.

Corporation Tax
When a property is introduced into a SSAS via an in-specie contribution by a Limited Company, it would be deemed an allowable expense when calculating the company’s Corporation Tax (subject to that contribution meeting the ‘wholly and exclusively for the purpose of trade’ test). For example, a company owns a commercial property valued at £200,000 which it contributes into its SSAS. That year the company makes £200,000 profit. Ordinarily, it would pay £40,000 corporation tax. However, by making a contribution of £200k this has now reduced the profit to zero, and no Corporation Tax would be payable.
N.B., When the property is contributed to the SSAS it must be at its current market value. If the tenant is connected to the SSAS, its sponsoring employer, trustees or members, then the tenant will have to pay rent to the SSAS at the prevailing market rate.

Personal Tax
There are three potential areas of personal tax benefit to be aware of:
1. Contributing the property
Where the commercial property is moved from personal ownership into the Ltd. Company (before being contributed to a SSAS).
This movement may create a credit to the director’s loan account, which can be repaid by the company at some stage in the future. The repayment of the loan account by the limited company is not subject to personal tax.
2. Rents
As rents are paid to the SSAS, the business owner will not be liable for personal tax until they start to draw a pension income from the SSAS. At this point (under current pension legislation), the first 25% will be tax-free and the remainder will be subject to the member’s marginal rate of income tax.
3. Drawdown
Funds (which includes accumulated rent minus any expenses) can be withdrawn from the SSAS (currently after the age of 55 or earlier if on the grounds of ill-health) with up to the first 25% of the member’s personal lifetime allowance, tax-free.
When evaluating the viability of moving a personally owned property into a SSAS or purchasing a property from a third party, it is important to consider all the other tax implications, such as Capital Gains Tax, Stamp Duty, V.A.T. and Land Tax. Professional advice should always be sought.

More Information
If you would like to discuss this particular aspect of SSASs in greater depth please call us on 0845 862 2869 and ask to speak to one of our advisers, or email us at
One to One Presentation
We also offer one to one online presentations covering the many applications of SSASs including loan backs and commercial property purchase. If you are an intermediary or business owner that would like to understand more about SSASs and how they can benefit SMEs please email

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