The SSAS Loan-Back Facility
A SSAS can lend money directly to the sponsoring employer — giving directors access to pension funds for business investment without triggering a taxable withdrawal.
What is a SSAS Loan-Back?
A loan-back (also called an employer loan) is a facility that allows a SSAS to lend money to the sponsoring employer. This gives directors access to pension funds for business investment without triggering a taxable pension distribution. The loan must meet strict HMRC rules to qualify as an authorised payment.
Three Critical Numbers
Every SSAS loan-back is governed by these HMRC thresholds.
50%
Maximum Loan Amount
Of net market value of scheme assets
5 Years
Maximum Loan Term
Not exceeding normal minimum pension age
BoE+1%
Minimum Interest Rate
Bank of England Base Rate plus 1%
Full HMRC Requirements for a Valid Loan-Back
All five conditions must be met. Missing any one can trigger unauthorised payment charges.
Loan Cap
Maximum 50% of the net market value of scheme assets at the time of the loan.
Loan Term
Maximum 5 years — not exceeding the normal minimum pension age for any member who is a security provider.
Interest Rate
Minimum Bank of England Base Rate + 1% — capital and interest repaid by equal instalments at least annually.
Security Required
The loan must be secured on first charge against assets of at least equivalent value.
Equal Repayments
Capital and interest must be repaid by equal instalments — no balloon payments or deferred repayment.
Benefits and Practical Applications
Loan-back is a flexible tool that gives directors access to their pension pot for business use — while keeping the money working within the scheme through interest payments.
Business Investment
Access pension funds for business growth — equipment purchase, property deposit, or working capital — without triggering a taxable pension withdrawal.
Interest Stays in Pension
Interest paid on the loan-back accrues within the pension scheme, tax-free — your pension benefits from the commercial interest rate.
HMRC Compliant
When structured correctly, a loan-back is an authorised payment under Part 4 of the Finance Act 2004 — no tax charge for the company or scheme.
Know the Risks
A loan-back that breaches HMRC rules is treated as an unauthorised payment — attracting a tax charge of up to 55% of the payment amount.
Worked Example
Scenario: £600,000 SSAS
Loan-back: The SSAS lends up to £300,000 (50% of £600,000) to the company. The company uses the funds for business investment and repays capital and interest over 5 years at Bank of England Base Rate + 1%.
Outcome: The interest earned (e.g. at 6.25%) accrues within the pension scheme, tax-free. The company benefits from competitive financing while the pension fund grows.
Loan-Back vs Other Finance
Loan-back is not always the most efficient solution. A standard commercial mortgage may offer a lower interest rate with a longer term. A commercial property purchase through the SSAS may be more tax-efficient for property investment. TLPI can discuss the appropriate structure with your client's financial adviser.
Compliance — What Goes Wrong
If a loan-back breaches HMRC rules, it may be treated as an unauthorised payment, attracting a tax charge of up to 55% of the payment amount. The most common breaches are exceeding the 50% cap, missing an annual repayment, or failing to maintain adequate security.
TLPI's administration service includes annual compliance checks on all outstanding loan-backs and management of loan documentation and interest rate compliance. This is a core part of what we do — not an optional add-on.
How the Referral Process Works
From introduction to fee paid — a simple 5-step process.
You Submit a Referral
Register as a partner and submit your client’s details via the secure portal. Takes under 2 minutes.
TLPI Contacts the Client
Our SSAS specialists reach out within 1 business day to explain the benefits. You don’t need to do anything else.
SSAS is Established
TLPI handles scheme set-up and HMRC registration. The client’s SSAS is fully established and operational.
You Receive Your Referral Fee
Once the SSAS is set up and active, TLPI pays your referral fee. Fee is paid on scheme establishment, not on referral.
Your Client Saves Tax
The director benefits from corporation tax relief, CGT exemption, and the ability to hold their business premises in their pension.
You Submit a Referral
Register as a partner and submit your client’s details via the secure portal. Takes under 2 minutes.
TLPI Contacts the Client
Our SSAS specialists reach out within 1 business day to explain the benefits. You don’t need to do anything else.
SSAS is Established
TLPI handles scheme set-up and HMRC registration. The client’s SSAS is fully established and operational.
You Receive Your Referral Fee
Once the SSAS is set up and active, TLPI pays your referral fee. Fee is paid on scheme establishment, not on referral.
Your Client Saves Tax
The director benefits from corporation tax relief, CGT exemption, and the ability to hold their business premises in their pension.
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