Contents8 sections
For business owners, company directors, and senior executives with UK company connections, pensions are not just a personal financial planning tool — they interact directly with the structure and financing of the business. The SSAS (Small Self-Administered Scheme) was designed precisely for this situation: a pension arrangement that sits at the intersection of personal retirement planning and business finance.
Understanding what a SSAS can and cannot do, how it compares to a SIPP, and what complications arise for expat directors is increasingly relevant as the generation of owner-managers who built businesses in the UK through the 1990s and 2000s now finds itself partially or fully relocated abroad.
SIPP vs SSAS: The Core Distinction
A SIPP (Self-Invested Personal Pension) is established by a pension provider — typically a platform, insurance company, or specialist SIPP operator. The member participates in the SIPP as an individual. The member can direct investments within the range permitted by the provider, but the overall governance, HMRC reporting, and regulatory compliance is the provider's responsibility.
A SSAS is a standalone occupational pension scheme established and run by the sponsoring company and its members. The members are typically also the trustees of the scheme, meaning they are collectively responsible for running the pension — making investment decisions, commissioning scheme valuations, filing HMRC returns, and ensuring compliance with pension legislation. A professional scheme administrator assists with compliance, but the trustees retain ultimate responsibility.
This distinction has profound practical consequences. A SIPP operates within the investment permissions and rules of the provider; if the provider does not allow a particular investment, the member cannot make it. A SSAS, operating under the direct control of its trustees, has considerably more flexibility within the statutory limits — particularly in relation to lending to the sponsoring employer and holding unquoted shares.
Lending to the Sponsoring Employer
The employer loan facility is the feature most distinctive to a SSAS and unavailable to a SIPP. A SSAS can lend up to 50% of its net scheme assets to the sponsoring company at any one time.
The loan must comply with strict HMRC requirements:
- It must be secured by a first charge over assets of at least equivalent value
- The interest rate must be at least 1% above the prevailing bank base rate
- The term must not exceed five years (though loans can be renewed)
- Repayments must be made in equal instalments across the loan term
When structured correctly, this arrangement is tax-efficient for the business: the company pays interest to the pension scheme rather than to a third-party lender. The interest income within the SSAS accumulates tax-free. The company receives tax relief on the interest payments. For an owner-managed business with cash needs and an established SSAS, this can be a more attractive source of business finance than a commercial loan.
The arrangement requires meticulous documentation and HMRC compliance. HMRC reviews employer loans in SSAS as a matter of course, and any loan that falls outside the required parameters — whether through inadequate security, below-market interest rates, or inadequate repayment schedules — risks being treated as an unauthorised payment, which would trigger substantial penalty charges.
Commercial Property in a SSAS
Purchasing commercial property is one of the most common and effective uses of a SSAS. The scheme buys the property, which may then be leased to the sponsoring company or to third parties. All rental income accumulates within the SSAS free of income tax, and any eventual capital gain on sale is free of capital gains tax within the pension wrapper.
This structure is particularly attractive for business owners who occupy commercial premises. Rather than the company paying rent to an external landlord, the company pays rent to the pension scheme — effectively to itself. The rent is a tax-deductible expense for the company, and the rental income accumulates tax-efficiently within the pension.
The SSAS can borrow to purchase property. The borrowing limit is up to 50% of the net scheme assets — so a SSAS with £500,000 in assets could in principle borrow £250,000 to purchase a property costing £750,000. The borrowing must be from a commercial lender on normal commercial terms.
Important restrictions apply. The property must be commercial — offices, warehouses, industrial units, retail units, agricultural land, and similar. Residential property is absolutely prohibited. Holiday lets are prohibited. Any property that would be used by a scheme member, their family, or any connected person for personal or residential purposes is prohibited. Purchase of development land requires careful legal advice. The trustees must ensure that the valuation and purchase are conducted on an arm's length basis and documented accordingly.
Unquoted Shares and Alternative Investments
A SSAS has more flexibility than a SIPP in relation to unquoted shares. Specifically, a SSAS can hold shares in the sponsoring company itself (subject to limits of 5% of scheme assets) and in other unquoted companies. SIPPs are not permitted to hold shares in the member's own company.
This opens up a range of alternative investment possibilities within a SSAS: direct lending through loan notes, equity stakes in trading businesses, and other non-standard assets. However, these must be investment-grade and genuinely structured for commercial return. They must not be connected transactions designed to benefit the members personally, and HMRC scrutinises non-standard investments in SSASs carefully.
SSAS Administration
Running a SSAS involves a level of administrative responsibility that significantly exceeds what SIPP members experience. The trustees of a SSAS must:
- Maintain scheme accounts and have them audited or reviewed annually
- File the annual scheme return with The Pensions Regulator (TPR)
- Submit event reports to HMRC for certain transactions
- Conduct triennial actuarial valuations (for defined benefit SSAS; DC-only SSAS are less onerous)
- Appoint and oversee the scheme administrator
- Ensure all investments comply with permitted investment rules
- Maintain documentation for all trustee decisions
For this reason, most SSASs engage a specialist SSAS administration firm to manage the compliance workload, even though the trustees retain ultimate responsibility. The cost of professional SSAS administration is typically higher than SIPP administration charges, reflecting the bespoke nature of the arrangement.
Legacy SSASs and Expat Business Owners
Many business owners who emigrated from the UK in the 2000s or 2010s established a SSAS during their years of UK trading activity. These schemes may now hold commercial property, employer loans, or other UK-based assets, and may have been running for 20 or 30 years.
When the directors who are also trustees of such a scheme move abroad, several complications arise.
HMRC Registration and Non-Resident Trustees
UK-registered pension schemes are subject to UK pension legislation and HMRC oversight. When all trustees of a SSAS become non-UK resident, questions arise about whether the scheme can continue to operate effectively within the UK regulatory framework. While non-resident trustees can in principle continue to administer a SSAS, practical and compliance challenges increase substantially.
The Pensions Regulator requires that scheme governance meet UK standards regardless of where the trustees reside. Non-resident trustees who cannot readily attend scheme meetings, deal with UK professional advisers, and ensure ongoing UK compliance are at risk of scheme administration failures.
The most common practical solution is to appoint at least one UK-resident professional trustee to the scheme alongside any non-resident director-trustees. This provides the UK governance anchor required while allowing the overseas directors to remain involved.
Employer Connections
A SSAS must maintain a connection with a UK employer. If the sponsoring company ceases to trade, is sold, or is liquidated, the SSAS loses its sponsoring employer. This is not automatically fatal to the scheme — the trustees can arrange for the scheme to continue without an active sponsor in a "winding down" mode — but it affects what the scheme can do going forward, particularly in relation to employer loans, which require an active sponsoring employer.
For expat business owners who have sold their company or wound it down, the SSAS may effectively become a personal pension arrangement without the employer-connected features. At that point, the relative costs and complexity of maintaining the SSAS versus transferring the assets to a SIPP should be reviewed.
SSAS vs SIPP: Which for Expat Executives?
The choice between establishing or maintaining a SSAS versus using a SIPP depends on several factors:
A SSAS makes sense where the business connection is active and ongoing, where the employer loan or commercial property features are being actively used, and where there are several connected directors who can share the trustee governance responsibilities.
A SIPP is more appropriate where the business connection has ended or is minimal, where simplicity and lower administration cost are priorities, where the member wants access to a broad investment platform rather than bespoke alternatives, and particularly where the member is relocating abroad without maintaining strong UK business ties.
For expats considering transferring a SSAS to a QROPS or an international arrangement, specialist advice is essential. A SSAS transfer involves not just the assets but the unwinding of potentially complex underlying investments including property and employer loans.
How Global Investments can help
Global Investments works with company directors and business owners across major markets worldwide who hold legacy SSAS arrangements or are reviewing their executive pension structure. We can help you understand whether your existing SSAS continues to serve your needs, assess the implications of non-resident trusteeship, and model the financial case for restructuring, consolidation, or transfer.
Contact our pensions advisory team for a review of your executive pension arrangements.
Frequently asked questions
5 questions
What is a SSAS and how does it differ from a SIPP?
A SSAS (Small Self-Administered Scheme) is a trust-based occupational pension scheme for a small number of company directors or key employees — generally up to eleven members. Unlike a SIPP, which is established by a pension provider and the member participates as an individual, a SSAS is a standalone scheme established by the sponsoring company. The members are typically also the trustees, meaning they run the scheme themselves (usually with the help of a specialist SSAS administrator). The trust structure gives the SSAS considerably more flexibility than a SIPP in terms of permitted investments and, uniquely, the ability to lend money back to the sponsoring employer.
Link to this questionCan a SSAS lend money to my company?
Yes. A SSAS can lend up to 50% of the net scheme assets to the sponsoring employer. The loan must be made on commercial terms — it must be secured on first charge assets, the interest rate must reflect commercial rates, and the term must not exceed five years (though it can be renewed). This is one of the features that makes a SSAS attractive to owner-managed businesses: the company pays interest to its own pension scheme rather than to a bank, and the interest accrues within the pension tax-free. HMRC monitors these arrangements closely and they must follow the prescribed requirements precisely.
Link to this questionCan a SSAS invest in commercial property?
Yes, and this is one of the most common uses of a SSAS. The scheme can purchase commercial property — offices, warehouses, industrial units, agricultural land — and lease it back to the sponsoring company or to third parties. Rental income accumulates in the scheme tax-free, and the eventual sale of the property is free of capital gains tax within the pension. The SSAS can also borrow to purchase property, up to 50% of the net scheme value. Residential property and holiday lets are not permitted, and the property cannot be used for personal occupation by any connected persons.
Link to this questionWhat happens to a SSAS if all the trustees move abroad?
This is a genuinely complex area. SSAS trustees are responsible for complying with UK pension legislation and HMRC requirements. If all trustees become non-UK resident, questions arise about the scheme's ability to continue as a UK-registered pension scheme, scheme administration obligations, and potentially whether the scheme needs to be restructured. Some older SSASs with non-resident trustees continue to operate under specific HMRC provisions, but this is an area where specialist SSAS legal and tax advice is essential. Partial non-residence — some trustees remaining in the UK — is considerably less problematic.
Link to this questionHow many members can a SSAS have, and who can be a member?
A SSAS can typically have up to eleven members. Members must be connected to the sponsoring employer — they are usually company directors or senior employees. Family members who are also employed by and have a genuine employment relationship with the company can be included. SSAS members are usually also trustees of the scheme, which is what gives them direct control over scheme investments and decisions. A professional SSAS administrator (the 'pensioneer trustee' in older arrangements, now typically simply the scheme administrator) is usually also involved to ensure HMRC compliance.
Link to this questionThis guide is for general information only and does not constitute financial, legal or tax advice. Pension rules, tax rates and programme details change; verify current requirements with a qualified and FCA-regulated pensions adviser before acting. Pension transfers involving defined benefits over £30,000 require regulated advice.
