Gareth’s limited company is in a very healthy position
financially and is having a year that is set to be quite profitable.
Gareth is looking to expand and grow the business further, while
taking advantages of available tax planning. Ideally, he would
like to combine the two strategies to ensure that his pension is
looked after, but also that his company retains its flexibility.

Gareth’s Accountant confirms the company can
make a pension contribution of £100,000. The
Accountant agrees that it passes the ‘wholly and
exclusively’ test, and that Gareth has sufficient
Carry Forward available to make the contribution.

Gareth’s Financial Adviser recommends using a
Small Self-Administered Scheme for his pension
planning. This is because Gareth’s scheme will be
able to facilitate a loan back to his company to
assist with expansion plans.

Gareth has a personal pension policy of £150,000
and the adviser arranges for the SSAS to be
established, and the contributions and transfers
made to the new Scheme. This gives a combined
total of £250,000.

Gareth’s company acts as Sponsoring Employer,
which means that the Trustees can grant a loan of
50% of the Scheme Value to the company. The
loan is subject to a legal agreement that requires
it to meet HMRC rules: no greater than a 5-year
term, interest at least 1% above base rate, equal
instalments of capital and interest, and a first
charge on assets equal to the loan plus interest.

Gareth offers a privately held property as security,
and the loan is drawn down. The remaining funds
are invested by the adviser onto a platform.

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