We frequently receive questions from clients and their advisers regarding assets in which SSASs are able to invest in. Whilst SSAS Practitioner.com Ltd aim to provide a SSAS with investment flexibility, we also take a responsible approach to the investments we allow in our SSASs. In practice, investments will be restricted by two factors:
1) The heavy tax penalties which HMRC will impose on certain investments; and
2) Additional restrictions imposed by a SSAS provider.
SSAS Practitioner.com Ltd will strongly advise against investments which incur tax penalties. We pride ourselves on flexibility and will not impose additional restrictions; if HMRC rules permit an investment via a SSAS we will not attempt to prevent it unless the client is lacking suitable financial advice. You should always contact us for confirmation before taking any action in connection with a particular investment, in order to confirm that we are in agreement and ready to proceed with it.
Please note that SSAS Practitioner.com Ltd does not provide investment advice and all investment decisions are made by clients in conjunction their advisers. We cannot take responsibility for the consequences of clients’ investment decisions.
Allowable Investments: These are the general types of investments which qualify for a tax free return if properly structured (please note, HMRC do not provide a definitive list of allowable investments; the list is non-exhaustive).
Cash deposits
Shares in companies listed on the main London Stock Exchange or the AIM or OFEX markets Shares in companies listed on a recognised overseas stock exchange
Shares in unquoted private companies
Unit trusts, open-ended investment companies (“OEICs”) and insurance company managed funds Government securities
Building society Permanent Interest Bearing Shares (“PIBS”)
Offshore funds
Traded futures and options
Hedge funds, exchange traded funds and restricted contracts for difference
UK commercial property and land (including agricultural land, sometimes hotels, nursing homes and public houses)
Real Estate Investment Trusts (“REITs”)
Second hand endowment policies
Secured loans to the employer limited company and loans to unconnected third parties
1) The heavy tax penalties which HMRC will impose on certain investments; and
2) Additional restrictions imposed by a SSAS provider.
SSAS Practitioner.com Ltd will strongly advise against investments which incur tax penalties. We pride ourselves on flexibility and will not impose additional restrictions; if HMRC rules permit an investment via a SSAS we will not attempt to prevent it unless the client is lacking suitable financial advice. You should always contact us for confirmation before taking any action in connection with a particular investment, in order to confirm that we are in agreement and ready to proceed with it.
Please note that SSAS Practitioner.com Ltd does not provide investment advice and all investment decisions are made by clients in conjunction their advisers. We cannot take responsibility for the consequences of clients’ investment decisions.
Allowable Investments: These are the general types of investments which qualify for a tax free return if properly structured (please note, HMRC do not provide a definitive list of allowable investments; the list is non-exhaustive).
Cash deposits
Shares in companies listed on the main London Stock Exchange or the AIM or OFEX markets Shares in companies listed on a recognised overseas stock exchange
Shares in unquoted private companies
Unit trusts, open-ended investment companies (“OEICs”) and insurance company managed funds Government securities
Building society Permanent Interest Bearing Shares (“PIBS”)
Offshore funds
Traded futures and options
Hedge funds, exchange traded funds and restricted contracts for difference
UK commercial property and land (including agricultural land, sometimes hotels, nursing homes and public houses)
Real Estate Investment Trusts (“REITs”)
Second hand endowment policies
Secured loans to the employer limited company and loans to unconnected third parties
Investment grade gold bullion
Other types of pooled investment vehicles where the scheme member cannot influence or use or control the investment (known as “genuinely diverse commercial vehicles”). If properly structured, these can invest in some of the unacceptable investments listed below (again, the list is non-exhaustive).
Unallowable Investments:
Residential or holiday property (including residential ground rents)
Tangible moveable property (art, antiques, wine, vintage cars etc.)
Commodities
Loans to connected parties (other than properly secured loans to a sponsoring employer) Property Limited Liability Partnerships
Wasting assets (having an expected lifespan of 50 years or less) Premium bonds
Unquoted “ethical” investments (carbon credits, overseas forestry etc) Solar panels, wind turbines and wood burners
Tax Charges on unallowable investments
The rules are complex, but generally the tax charges on unacceptable investments are a 40% tax charge paid by the scheme member and a 15% tax charge paid by the scheme. If the investment constitutes more than 25% of the fund value, the member’s tax charge increases to 55% and in addition HMRC has the power to de-register the scheme, applying an extra tax charge of 40% of the total scheme assets. As a result, the total tax charges could exceed 100% of the investment, and it is therefore absolutely essential that a scheme does not make unacceptable investments, either directly or indirectly. Scheme members will be responsible for any tax liabilities resulting from an unacceptable investment.
Residential or holiday property (including residential ground rents)
Tangible moveable property (art, antiques, wine, vintage cars etc.)
Commodities
Loans to connected parties (other than properly secured loans to a sponsoring employer) Property Limited Liability Partnerships
Wasting assets (having an expected lifespan of 50 years or less) Premium bonds
Unquoted “ethical” investments (carbon credits, overseas forestry etc) Solar panels, wind turbines and wood burners
Tax Charges on unallowable investments
The rules are complex, but generally the tax charges on unacceptable investments are a 40% tax charge paid by the scheme member and a 15% tax charge paid by the scheme. If the investment constitutes more than 25% of the fund value, the member’s tax charge increases to 55% and in addition HMRC has the power to de-register the scheme, applying an extra tax charge of 40% of the total scheme assets. As a result, the total tax charges could exceed 100% of the investment, and it is therefore absolutely essential that a scheme does not make unacceptable investments, either directly or indirectly. Scheme members will be responsible for any tax liabilities resulting from an unacceptable investment.
