For the business owner a Small Self-Administered Scheme (SSAS) can be considered for retirement planning.
Profits left in a company, or withdrawn as dividends or income, usually incur substantial tax charges and possible National Insurance payments.
Investing profits in a pension scheme however, with the associated tax advantages this brings, may seem a better answer. This is particularly appropriate where the scheme members have the ability to control the funds held by the scheme.
A SSAS provides a tax-efficient environment in which a company’s profits can be invested to provide significant retirement benefits for directors. As the fund grows it can work for the company and still generally be free from creditors should the business fail.
A SSAS gives company directors the opportunity to maximise their pension funds prior to retirement by giving them control over their investments. Unlike other pension schemes, the directors can invest their pension funds in their own company, for example through share purchase, loans or by purchasing commercial property to lease back to the company.
With good corporate financial planning advice, innovative entrepreneurs can make their pension funds work for their business whilst building up a substantial pension fund to benefit them in retirement.
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