Having looked further into the content of the recent Pensions Green Paper aimed at simplifying and encouraging more people to save, it would appear that the Government are planning to place restrictions on the ever increasingly popular Small Self Administered Schemes (SSAS) and Self Invested Personal Pensions (SIPPs).
Pension rules generally allow that pension funds can invest in things like commercial property with SSAS also being allowed to lend employers money and own shares in the sponsoring employer.
These rules have been used to great effect by business owners, partnerships and sole traders to use their pension funds to develop their business. Many have used up the facility to purchase property and lease it back to the employer.
In a recent survey by the Inland Revenue, it was found that 42% of SSAS schemes have loans outstanding to them whilst 39% own commercial property. The Revenue is concerned that if a business fails there is not enough security for the pension fund to reclaim its debt. They are reviewing the rules in view of some of the company difficulties in the US. In simple terms, they believe that pensions should be used for retirement planning and not for corporate development.Find out more about using Pensions for Business in the Business Owners Centre.Would you like to make use of our "Ask An Adviser"