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ssas solutions -let your business grow

OUR STORY

HOW A SSAS WORKED FOR US:

Having established SSAS Solutions back in 2009 - in the early days our accommodation requirements were somewhat modest. We initially rented office space and whilst this was sufficient for our needs at that time – there was always the underlying feeling that paying rent to another business was not the most efficient or preferred use of our hard earned cash!

Our medium term objective was to purchase a property from which our business could operate and grow. However, as the business expanded considerably in the first 2/3 years, we were rapidly running out of space which was inhibiting us from recruiting additional staff. Storage was also fast becoming an issue. Therefore in order for us to continue to grow, finding the right property was becoming more of a short term objective. The key to finding the right property was simply down to opportunity and a certain amount of luck. However, the issue of how to pay for the ‘right’ property when it came along was also at the forefront of our minds.

Having spent many years advising our clients on exactly the same issues and strategy, the obvious answer was, of course…. to use our existing pension funds. See our timeline on the right for details of how we turned our ‘medium term’ strategy into our ‘short term’ strategy with the use of a SSAS.

personal level


Achieving our goal of owning our business premises through a SSAS helped us to benefit from the following tax advantages:

TIMELINE

January 2012 – a property agent (with whom we had been working closely, through a client assignment) asked if we were interested in acquiring our own business premises. When we confirmed that we would be interested – a property was quite quickly identified.

February 2012 – we made several visits to the property to ascertain the suitability and condition.

March 2012 – renovation quotations were obtained as the property required significant renovation and modernisation. A structural survey was also carried out. We established a SSAS and transferred in our existing personal pension funds from 4 different legacy pension arrangements. The existing pension funds transferred across in cash. These funds were then ‘topped-up’ with new pension contributions.

April 2012- Having established the renovation costs, (and taking into account the likely purchase price) – we knew that additional borrowing would be required to complete the project. The new SSAS then applied to a bank for funding which was agreed within a short timeframe. As the property had been VAT elected and substantial renovation works were required, the new SSAS was registered for VAT and an option to tax was lodged with HMRC in relation to the property.
With the funds in place, we made an offer to the vendor and after some negotiation, a price was agreed upon.

May 2012 – the conveyance process progressed. Tenders were issued to 5 contractors for the renovation works.

June 2012 – the property purchase completed. Tenders were returned and a contractor was selected. VAT was reclaimed on the purchase price of the property.

July 2012 – Renovation works commenced. The contractor issued stage payment invoices under their JCT contract and payment was made directly from the pension fund bank account. Additional items (outside of the main contractors remit) e.g. sanitary ware, ventilation system, lighting etc. were also purchased directly from various suppliers and paid for from the pension fund bank account. VAT was reclaimed on the various renovation expenses, where allowable. This helped with the cashflow of the project.

November 2012 – property renovation works were completed and the building was handed over. SSAS Solutions then took on the head lease for the premises. An independent rental valuation was obtained to establish the market rent for the newly renovated property. A tenancy lease between the pension fund trustees (as landlord) and SSAS Solutions (as head tenant) was prepared and put into force.

December 2012 - to date – the tenancy commenced and as the office space had been designed to separate various areas of the building, SSAS Solutions decided to sub-let some of the office space and secured it’s first tenant later that month, resulting in additional income for the business. The rent paid by the head tenant (SSAS Solutions) is equivalent to an 8% yield which produces a steady investment return for the pension fund.

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Northern Ireland’s largest independent firm of dedicated SSAS consultants offering business owners bespoke retirement solutions.

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SSAS Solutions (UK) Ltd
Rivers Edge
11 Ravenhill Road
Belfast
BT6 8DN

email ssas info@ssassolutions.com

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