Question: I have a client who has a 500k fund in a SIPP accrued from previous employments. He has in the last 12 months set up a new ltd co with no existing pension provision. He is attracted by the idea of the employer loan back facility on a SSAS and I wondered if you could tell me whether it would be possible to put the SIPP fund under a new SSAS to take advantage of loanback.
Stewart Dick: There is no problem at all in transferring the SIPP into a SSAS, and we are seeing an increase in this sort of enquiry. When looking at the loan back to employer there are 5 key tests set by HMRC that must be met: The maximum loan amount is 50% of the net SSAS fund - so £250k in this instance. The loan will be for a maximum term of 5 years. The loan must be secured by way of a first charge. NB This does not necessarily have to be on a company asset and we can look at a number of alternatives to help clients meet this criterion. The interest rate charged must be...
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