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SSASy loan
KEY POINTS
- A loan to a business from a pension scheme can be beneficial.
- Five tests must be met for the loan to be authorised.
- Security is required for the duration of the loan.
- Unauthorised payment charges should be avoided.
In recent years many people have used their pension funds to support their businesses an arrangement that can benefit all participants. However the consequences if the rules are not followed can be significant and in the worst-case scenario the pension member can be left with very little.
In most circumstances loans from registered pension schemes to the member or any party connected to them (as defined under TA 1988 s 839) are prevented by HMRC rules. Any such loans are subject to unauthorised payment tax charges which will amount...
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