Free SSAS Pension Review for Brits Living Abroad
QROPS Specialists are offering a free SSAS pension review for British expats living abroad. 1 in 10 Brits now live overseas and many have set up a SSAS for their own businesses or to include their properties. A Small Self Administered [Pension] Scheme is a growing sector of the UK market. However, many expats don’t realize that the cash or equity/bond/mutual fund portion of the SSAS can be transferred overseas to minimise income taxes and avoid all taxes on death in most cases.
Pension Payments from a SSAS
Pension payments and retirement benefits paid out from a SSAS take the form of a lump sum, capped drawdown or a purchase pension annuity. If this pension is left in the UK and an expat lives abroad, in most cases, you will still pay UK income tax and a tax on death in old age.
A private or occupational pension pot can be moved overseas to a Qualifying Recognised Overseas Pension Scheme (QROPS). This avoids UK income taxes and tax on death. Income tax in your country of residence in retirement will vary, but often can be reduced to 2.5% or 0% depending on the various tax treaties which exist.
What Should Not Be Moved from a SSAS
Property should be retained within a SSAS in most cases. Only the cash/equity/bond portion of your pension should be moved to a QROPS.
Shares in the business should also not be transferred and is better left in a SSAS.
QROPS Benefits for Cash/Equity/ Pension Fund in a SSAS
- No tax on death in the UK
- No income tax in the UK
- Often very low or zero tax in your country of residence in retirement
- The chance to reduce your income taxes if you ever move back to the UK
- Choice of currency to stabilise your pension payments
- Wider choice of investments
Issues with a SSAS
Where the SSAS does not have a professional trustee, there is a risk that poor administration and lack of familiarity with pension’s legislation may lead to tax charges.
SSAS schemes must ensure they are consistent with HMRC rules. Whilst SSAS are not regulated by the Financial Conduct Authority (FCA), they must fulfil obligations laid down by HMRC and The Pensions Regulator. It said non-compliance could result in large fines and possible de-registration of the scheme.
Scheme administrators also need to meet the HMRC ‘Fit and Proper’ person’s test which includes extensive knowledge of the ever-changing pensions legislation.
That is why we are offering a free SSAS review.
Inheriting a SSAS
There are issues with inheriting a SSAS, particularly if the member was already in drawdown and up to 45% tax on death is applied after 75. This is much more troublesome if the SSAS owns commercial property which pays a rental income, but the children or other beneficiaries have no experience of running the business.
In such circumstances, it would make sense to get in an experienced business partner to grow the business and secure the pension income from the rental whilst preserving capital & assets.
In other cases, where the tax on death isn’t too onerous, the children may seek to purchase property outright through a remortgage.
SSAS Members Moving Abroad
If you have a SSAS and you are considering moving abroad, please drop us a line. We will perform a free SSAS pension review and give you some options on how to minimise taxes and maximise pension growth, whilst seeking stability.
Please click here to learn more about UK pension transfers overseas to a SSAS.Free SSAS Pension Review for British Expats by Richard Malpass