How Much Can be Put into a SSAS Each Year?
Contributions to SSAS are the same as they are for all UK registered pension schemes. You have a personal allowance, which in the current tax year is up to £60,000.
Company Contributions to the SSAS
If you are making a contribution from your Company, which is what most SSAS Members do (they get their Company to contribute funds to their SSAS for them). Quite often, we will see most of our SSAS Members contributing up to the maximum personal allowance in the current tax year.
With a Company contribution you can carry forward unused relief from the last three tax years.
It is important to remember you must use the current year’s allowance first and then you may go back up to three complete tax years, providing of course you had a pension in existence for those three tax years (that’s the qualifying criteria).
Personal Contributions to the SSAS
If you are going to make contributions to the SSAS of a personal nature, then the contribution rules are different again. Contributions to SSAS, if they are made personally, can only be made against your PAYE income for the tax year in question.
For example, if you have a salary of say £50,000 per year then you may contribute up to £50,000 in that tax year. In addition, you also need to consider how much income you are drawing in any one tax year. If you have income in excess of say, £320,000 then it is likely your contribution allowances, whether they are corporate or personal, will be scaled back to an absolute maximum of £10,000. So, we do need to have a look at how much income you are drawing.
We will calculate the maximum contribution for you. What we will need to know is exactly what you have paid into any other pensions in the last three tax years, including this tax year.
Where are You Making Contributions from?
The important thing is to understand where you are making contributions from. Are they coming from the Company, or do you intend to make them personally? Please speak to us and we can explain the best ways to fund your contributions.
Contributions Per Member
One of the key advantages of having SSAS is that you can have more than one member. For example; a husband and wife who run the Company and both the husband and wife are Directors and members of the SSAS.
Each could utilise up to £60,000 per member in the current tax year which, if paid by the Company, can be a deductible expense - therefore reducing your corporation tax bill.
Contributions for Grown-up Children
On top of that, if you have grown-up children who are also Directors or employees of the Company that has set-up the SSAS they may also be members of the SSAS and the Company may also make contributions for them too.
Depending on their status in the Company you may have an allowance of up to £60,000 for the current tax year. We do like to involve the Company’s accountant in these discussions so that we get the best outcome for you as a member and members of the SSAS.
There is plenty of flexibility here; you can potentially build some substantial value inside SSAS very quickly if you’ve got multiple members and hopefully a very profitable Company saving lots of Corporation Tax along the way.
How One Crown Pensions Can Help
Finally, at One Crown Pensions we do of course keep a strict record of the contributions that everybody has made. We know exactly what contributions have been made and any remaining allowances in each and every tax year.
We would encourage you not to just leave those funds that you’ve paid into the SSAS languishing in the SSAS bank account earning very little amounts of interest, but rather to look at investments and make sure that the money in SSAS is working for you as hard as possible.
