| Are they different after the
changes that came in on 6.4.06?
Yes. Fundamentally a SSAS is a stand alone scheme, usually
(but not necessarily) with an associated employer. A
SIPP is a personal pension
What about trustees?
A SIPP is effectively part of a "Master Trust"
and with some SIPPs the member is also a trustee and
in others they are not a trustee. In the MW SIPP 2 it
is the latter, with MW SIPP Trustees Ltd being the sole
trustee.
In a SSAS, all the members must be trustees. It is
preferable to also have a Professional Trustee, as otherwise
HMRC are likely to consider the scheme to be "high
risk" and take an interest in it.
Who can be a member?
Basically anyone in the UK can have a SIPP and there
is no minimum age – so a SIPP could be set up
at birth.
Because, in a SSAS, all members must be trustees, the
minimum age for membership in a SSAS is 18 (the lowest
age at which someone can be trustee under Trust law).
In a SSAS, even if there is a sponsoring employer,
members no longer need to be employees to join the SSAS.
What about the legal aspects?
A SSAS has its own personalised documentation i.e. its
own Trust Deed and Rules. A SIPP is just part of an
overall Trust Deed that covers all the members of that
SIPP.
What about Protected Rights?
A SIPP can accept Protected Rights, a SSAS cannot (because
it is not a personal pension scheme)
|
What about investments?
In most areas there is no difference. The areas of difference
are:
a) a SIPP cannot loan any monies to any connected company,
whereas a SSAS can loan up to 50% of its assets to a
connected company on normal commercial terms and providing
certain defined HMRC requirements are met. Neither a
SIPP nor a SSAS can loan money to the member;
b) a SSAS is limited to 5% of its assets being invested
in unquoted shares of a connected company. A SIPP has
no restriction, though care is needed with investment
in unquoted shares.
One other advantage of a SSAS is that it more easily
allows co-mingling of the underlying investments. This
can make investing in commercial property, say, a little
easier, as with a SIPP, each SIPP would be a separate
purchaser and there would be a need for a legal Syndicate
agreement. This is not the case with a SSAS.
What about reallocation of benefits between
members?
This is not allowed
IHT
There are no differences in IHT treatment between SSASs
and SIPPs.
What about costs?
We can only talk about our own fees. The annual fees
for a SSAS are £950 (£1200 if trustee services
are provided via Specialist Trustees Ltd). For a SIPP
the annual fees are £600. So for 3 people eg.
husband, wife and son, a SSAS is cheaper going forward.
However, the set up fee for a new SSAS is considerably
more than for a SIPP.
Because a SSAS has its own personalised legal documentation,
the ongoing costs of keeping up-to-date with the legal
requirements will be higher
|
Lowtax Network Portal
Front Page
Tax Jurisdictions
Featured Content
