By Ian Ward, Partner at Barnett Waddingham
Why trustees might decide to transfer their SSAS
Typically, trustees change to suit a scheme’s changed environment. Schemes can become more complex, for example, where they expand over time to hold multiple properties, or there is multi-generational involvement as the founding business has evolved or been sold as the initial members age.
Increased complexity may also arise from difficulties apportioning the funds between members, perhaps due to earmarking of investments and queries over documenting how member shares have been derived.
Similarly, property paperwork such as leases and title may not be in line with requirements. It can often be tempting from a cost management perspective to take a laissez-faire approach. But while some matters can be deferred, there can also be problems where those matters need bringing up to date to facilitate something important such as a retirement, or the sale of a company. We have a specialist team working on cases which need bringing up-to-date, as described in our Repair Shop article.
Sometimes trustees can struggle to obtain full and correct guidance on the ever-expanding legislative and regulatory requirements. It is not always feasible for trustees to devote sufficient resources to keeping abreast of developments.
We also find sometimes that documents are old and conflict with legislation. Some have rules which would appear to prevent the trustees from taking advantage of what the legislation permits. While there can be legislative overrides, our view is that it is good to reduce these perceived conflicts, even if that does mean short term costs and paperwork.
Along similar lines, it can be the case that reports and returns to regulatory bodies have inadvertently fallen behind and need bringing up to date. We comment on some of the issues above in our MOT for SSAS article.
Commonly, this can represent a challenge to trustees to consider whether they are receiving longer term value for money, distinct from low current costs.
Timescales for transferring a SSAS
It can be off-putting that the timescale to change trustee and bring the scheme up-to-date can appear lengthy. For example, trustees would rightly be concerned not to disrupt members from starting to draw benefits or time constrained investment transactions such as property purchases or leases.
It is not always straightforward to update bank mandates and investment registration to reflect a change in trusteeship. Typically all trustees will need to sign a collection of paperwork to consolidate the change of trustee, and that will involve an investment of time.
What help is available?
Barnett Waddingham has been a major provider of SSASs since the firm was established in 1989 and they continue to be a successful part of our business to this day. We have built the business on the basis of doing the right thing, by providing high quality consultancy and administration, supported by a named client manager for each scheme.
Our key philosophy for being appointed by our SSAS clients is that we understand they are the decision makers for the scheme and they take ultimate responsibility. Clearly, where we act as professional trustee, we will be very much involved in providing guidance around decision-making and the consequences flowing from proposed activities. This would mean we may need to guide you so the scheme is run properly and no adverse tax charges are likely to arise.
However, we recognise that we are appointed by our co-trustees. Where appropriate we can instead provide a 'practitioner only' service, where you can still benefit from our input, but as we are not a trustee we are not directly involved in the decision-making process.
In line with the preferences SSAS clients have for control and flexibility, our philosophy means that we generally will let trustees choose how to run their scheme with regard to choice of scheme bankers, investment managers, solicitors, property insurers and so on. In particular, we do not act as financial advisers, and so have no axe to grind when it comes to the investments of the scheme. We are happy for our co-trustees to manage their property and investments. This provides more flexibility and means we only charge for the services required from us, though clearly it also places more responsibility on our co-trustees.
It is now possible to arrange the documentation so we can engage with the authorities and investment providers on behalf of the trustees as a whole to update the paperwork to re-register assets. Some documents still need the trustees to sign individually, such as bank mandates, but this approach can reduce workloads for the member trustees.
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