A Small Self-Administered Scheme is also known as Self-Administered Pension Scheme (SAPS) or Self-Directed Trust. It is useful for both directors and employees. It has greater flexibility and gives you more control over the investments and costs of your pension wealth planning. It is approved by the Revenue Commissioners and is an excellent vehicle for maximising the tax efficiency of your pension planning.
What are the benefits of setting up a small self administered pension scheme?
There are a number of benefits associated with SAPS.
Tax efficient.
Employer contributions (within Revenue limits) are allowable as a deduction against Corporation Tax. They are also not treated as a benefit in kind for the scheme member. This is in contrast to a wage increase in a similar amount, which would attract an income tax liability for the employee.
The employee's contributions to the scheme also attracts income tax relief.
The growth of a SAPS is tax free. Currently a SAPS is exempt from, Income Tax, DIRT, Capital Gains Tax in Ireland.
Control
You can control the choice of assets your SAPS invests in, subject to revenue requirements.
You also have control over the level of risk you are willing to take. This gives you great flexibility when it comes to taking advantage of any investment opportunity which may arise.
The above areas of control mean that you can also know the level of costs associated with the SAPS. These costs are also tax deductible for the company.
You can control the amount of contributions into your scheme.
It is a great way to move assets into a pension vehicle.
It is a great estate planning tool.
What happens if I die before retirement?
The value of your SAPS at the time of your death is used to provide benefits for your next of kin. A lump sum of up to four times your salary can be paid to your estate tax free. If there are funds remaining after this payout, then an annual income for dependants can be purchased with the surplus.
What is the difference between a SAPS and an ordinary pension?
The main difference is that instead of giving your contributions to an insurance company to invest on your behalf, you invest the money yourself, with the help of a pensioneer trustee, who must be Revenue Approved. We can help with all the details of setting up the scheme so that it meets these requirements. We work with a number of such trustees, who would be available for your self administered pension scheme. The revenue have placed some restrictions on how you can invest the pension funds.
Where can I get independent qualified advice on SAPS in Ireland?
Our qualified experienced experts can help you to decide if a Self-Administered Pension Scheme is suitable for you. We will advise on how to set it up and how best to maximise the growth potential of the scheme. We offer a complete Pension Service to employers in Ireland. Contact us today for a Free, no obligation, consultation. Telephone 1890 666 666 or use the blue call me back button.
