Certax Accounting (St Albans District) Ltd

Explaining SSAS pensions with Zee Razaq

Our MD Zee Razaq talks on Sky Property TV with Stephen Galpin, going over everything SSAS pensions. Watch the full video to learn exactly why you need one in your business, and the advantages they hold. Setting one up correctly can save you hundreds of thousands, even millions, as you begin to use it to invest.

Here’s a short extract from the video to give you a taste of what’s inside:

Property matters: Focus on SSAS pensions with Zee Razaq

Stephen: Welcome to property matters I’m Stephen Galpin and today we’re going to be talking about pensions and property, and joining me to impart his specialist knowledge is Zee Razaq, MD of Certax, who are property taxation specialists based in Saint Albans. Welcome, good to you see you.

Zee: Yes, but thank you for inviting me on Stephen and I’m looking forward to this because as I mentioned, this is an area that I really love because not many people understand it.

Stephen: No they don’t me included, I have to say. So I’ll try and keep my questions as pertinent as possible but you’ll have to bear with me! Okay, well look what I’d like to do is is start off we’re starting off going to talk about ‘self-invested personal pensions’ and ‘small self-administered schemes’ which are SIPPS and SSAS’s I think in your technical expression, aren’t they?

Zee: You’ve done so well! I thought I’d have to explain what they meant but no that’s fantastic.

Stephen: Well that that’s the first point, perhaps you would like to explain the difference between the two and what exactly they’re made up of.

Zee: No it’s fantastic because normally people think of Pensions and it’s like that thing that happens when you’re 55, 57 or in your 60s and they don’t realize they are entrepreneurial tools. We’ve chosen these two because there’s a whole host of Pensions and I’m sure many pension advisors will be saying oh there’s a lot, but these two are what are commonly used as the entrepreneurial tools. A SIPP basically, compared to a SSAS, we’re going to predominantly focusing on a SSAS, but I wanted to do this comparison. A sip is basically, generally it’s not a master trust because you’re normally on the pension provider’s ‘Master trust’ whereas with a SSAS, it is a master trust. I.E it’s your own pension.

Stephen: Okay so let me just clarify that. So one you’re administering yourself and the other is administrated by a set of professionals.

Zee: Absolutely. Just to caveat that, when you’ve got a SSAS it’s a company. It’s linked to your company, okay? And another thing is normally you would have a, what we call, corporate trustee. Because the administration isn’t straightforward around the trust to support you when you’re doing a SSAS.

Stephen: Okay. A bit like a legal advisor if you like?

Zee: Absolutely.

Stephen: Good, okay. So we’ve clarified that so I think the next obvious question from that is, which are suitable for whom I suppose. So in what circumstances would you have a SSIP and in what circumstance would you have a SSAS?

Zee: I think that the key bit is what you want to achieve, and this is where you should speak to your Tax Advisor who understands this area, to give you the advice and how it does link into your overall objectives of what we call ‘Financial Freedom’. And this is one of the key tools to help achieve that, so if you want to grow your wealth and entrepreneurial aspects, and be able to pass that Legacy over to your children, one of the strongest ways is using a SSAS. As I’ve just explained, it’s a master trust and you’ll probably say to me “Zee, what the hell is a master trust?”

Stephen: Well, you tell me!

Zee: Yeah, yeah. The master trust basically means is it is your trust that you set up and you have ultimate ownership of. And the key areas where you can differentiate compared to a SIPP is when you… Unfortunately, everyone’s going to leave this world. I.E. pass away. So, how do you pass that money over to your beneficiaries, which are normally your children- without tax. I love that part.

Stephen: Yes.

Zee: And there’s two key Parts. Before 75 and after 75.

Stephen: So am I not right to think the law is changing on that or the regulations have changed?

Zee: A very good point, because as we’re recording this, there is conversations around potentially changing this. Very good point. But right now we have to go by what it is currently. Now I’m sure and I just will say to the government if they are watching and Rishi and the crew are understanding this-

Stephen: I’m sure they’re glued to their seats(!)

Zee: I love it! They’ve got to really think carefully about this because it’s not something that is just a short grab for tax. It’s a long-term impact, because they’re supposed to be making people invest into pensions for their future, not disincentivizing them. I think the area that we’re going to talk about is, before 75 currently, if you pass away and you leave it to your beneficiaries they get it without any income tax. Which is massive. So they pass the legacy over and the beauty is, within a SSAS, even if you’re over 75, where you normally pay income tax you can leave it in the SSAS and therefore protect it.

Stephen: It doesn’t terminate at that age point?

Zee: Absolutely. And I think that’s the big difference between a SSAS pension and a SIPP. Because a SIPP, what will happen is, when you pass away, the pension provider wants to wind it up. It’s, you know, it’s a problem. Whereas a SSAS, if you set it out properly, it can run forever. That’s the beauty of it.

Stephen: Now, am I right in thinking that in either one or both of these, you can start to get your rental income and any benefits derived from that investment tax-free?

Zee: Absolutely. And I think we’ve got to break that down and unpack it because…

Don’t forget to watch the full video to find out more – there’s a tonne of knowledge packed inside, and we’re sure you’ll find it useful. Most people don’t realise how much a game changer these pension plans can be. They are more than just a pension, they’re an entrepreneurial tool.

If you enjoyed the video and want to learn more, or are thinking of setting up your own SSAS pension, feel free to contact us here. Also, if you’re looking for similar content, be sure to check out our YouTube channel, where we upload regularly.

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