City Trustees - part of Mattioli Woods



Innovative business financing

"Our products offer a number of ways to interact with a clients' business"

We believe that our product offering provides a number of ways to interact with a clients' business.

Both Self-invested personal pensions (SIPP) and Small self-administered schemes (SSAS), have always been a useful tool in helping a member's business.  Setting up a SSAS in particular, can typically benefit a company's controlling directors and senior management.

Providing great flexibility and control in a tax-efficient environment, a SSAS is an occupational pension scheme that can give clients the ability to invest back into their own business. Such schemes can invest in a vast range of assets and investment vehicles, including the ability to invest in the client's own business either through the purchase of shares, loanbacks or the purchase of company premises.

Loanbacks

In some cases, the use of directors' pension benefits to establish a SSAS is an option. A SSAS is able to lend half of its net value to a sponsoring employer and this type of pension scheme can lend money at a commercial rate. A loanback can be useful in assisting the development of a business. A lump sum contribution can be made to the pension scheme creating a corporate tax saving and then loaned back to the business in order to retain the cash within the company. It should also be noted that any interest paid to the pension scheme will also reduce profits, creating future corporation tax savings.

Commercial property

In some instances, where a company may find it difficult to obtain funding to expand the business or buy plant and machinery, there is the possibility of purchasing part/all of the commercial property to release funds from the scheme. The company's outgoings can therefore be re-engineered to be more effective.

Stocks and shares

Self-invested pension schemes can also be used to help provide liquidity to businesses by purchasing shares in that particular company. By purchasing unquoted shares, especially if the business is looking to take advantage of opportunities in the market, there is the potential of sufficient returns for the pension scheme.

Strong administration

As you would expect with all of these options, the legislation that surrounds these transactions is complicated and as such, the application of the rules to an individual situation is essential.

Both SIPPs and SSASs are complex pension vehicles, and as such need to be carefully managed, with a high level of involvement from its administrator. Since the implementation of removing independent professional trustees to manage a SSAS in April 2006, many pension pots have unfortunately been poorly managed, exposing savers to unnecessary costs and risks. City Trustees appoints each client with a dedicated account manager to oversee all aspects of the schemes administration.

Contact us

For more information on business financing options through a self-invested pension, please call us on 0116 240 8730 or email info@citytrustees.co.uk