What is a SSAPS?
A Small Self-Administered Pension Scheme (SSAPS, sometimes known as a Self-Invested Pension Plan, or SIPP) is simply a pension backed by your employer.
The rules state that an employer can establish a SSAP for any employee.
The benefits of a SSAP
SSAPS have three major attractions to investors in Ireland.
1. You’re in charge
The great advantage is that you can steer the pension just like you would any other of your investments. A SSAPS gives you the widest investment choice of any pension vehicle, from investment funds and company shares, to commodities and futures, to loan notes and private investments, and of course directly held property.
2. Investment property
One of the main reasons people in Ireland establish Small Self-Administered Pension Schemes is to invest in property.
As the buy-to-let sector has professionalised in Ireland in recent years, and the tax burden has grown, pensions have become a major vehicle to invest in property to generate strong returns.
You can raise a mortgage against investment property in your pension just as you might with any other property investment.
As the cash from rental income and fresh contributions comes back into your pension, a good investment advisor can help you build out a diverisfied, more international portfolio to complement your property holdings.
3. Tax
SSAPS come with all the tax benefits of a pension.
These tax benefits are at their most powerful in a SSAPS. When purchasing property through a SSAPS you can offset your expenses (including stamp duty, property tax, water charges, ongoing maintenance, and professional costs such as solicitors, auctioneer, and management charges).
The rental income is not taxable, and if you sell the property no Capital Gains Tax is payable.
You can also retain your property investment in a pension structure when you retire, and it can be use the rental cashflow as income.
Your SSAPS team
A well-run SSAPS needs a strong team. The main players are:
You are the ultimate beneficiary of the pension, no-one is better-placed to steer it. SSAPS are successful when run by an individual with a clear plan and ongoing focus on maximising the performance of the underlying property investments.
The trustees are responsible for the good governance of the pension. They make sure it is run in line with Revenue rules. Moneycube has relationships with a number of expert ‘Pensioneer Trustees’ who are approved by Revenue to perform this work.
The financial advisor Moneycube’s job is to bring your SSAPS into being and help it perform to your objectives over time. We provide ongoing investment advice, and can assist with ongoing services such as accounting, mortgages, and the appointment of the Pensioneer Trustee.
