Case Study: Company Director With a SSAS — Pension Planning When Selling Your Business (2026 Guide)

When a company director is approaching retirement — especially one who has built a business over decades — the questions they face about their pension are some of the most complex in financial planning. James came to us six months before he expected to agree a sale of his manufacturing business, wanting to understand his pension options before the deal completed.

What followed was a detailed review of his Small Self-Administered Scheme (SSAS), his personal circumstances, and the interaction between the business sale and his retirement income. This case study, with all identifying details changed, illustrates the key planning opportunities and pitfalls for company directors in this position.

Background: James’s Financial Picture

James, aged 58, had co-owned a precision engineering business in North Yorkshire with his brother for 28 years. The business employed 45 people and had been consistently profitable. A trade buyer had been identified, and heads of terms were expected within 12–18 months.

James had contributed to a Small Self-Administered Scheme (SSAS) for 20 years, alongside his brother (who was also a SSAS member and trustee). The SSAS held:

• A commercial property — a small industrial unit valued at approximately £280,000 (leased to the company at market rent)
• Investment portfolio (equities and bonds) — approximately £390,000
• A scheme loan to the company — £70,000 outstanding (original loan £100,000, five-year term)

Total SSAS fund value: approximately £740,000.

James also had a deferred occupational pension from an earlier employer — a small defined benefit (DB) scheme with a Cash Equivalent Transfer Value (CETV) of £42,000, providing a projected income of £2,200 per year from age 65.

His brother (60) intended to continue working in a consultancy capacity after the sale and was less focused on immediate retirement income. Both were trustees of the SSAS.

James’s Goals and Concerns

James had four primary objectives when he came to us:

1. Understand what happens to the SSAS when the company is sold — he wasn’t sure whether the scheme had to close
2. Maximise his retirement income from age 60 — he planned to stop working after the sale
3. Protect his family — his wife (56) was not in paid employment; he wanted to ensure she was financially secure if he died first
4. Consider the 2027 pension IHT changes — he had read about the proposed changes and was concerned about their impact on his estate

What Happens to the SSAS After the Business Sale?

This was James’s first question, and it’s one that many company directors overlook until too late. The key points were:

The Employer Loan

The £70,000 outstanding loan to the company was a critical issue. SSAS loans must be secured against company assets and must be repaid on commercial terms. When the business is sold:

• If the loan is not repaid before or on completion, the buyer’s solicitors will require clarity on the charge over company assets
• The loan must be recalled or assigned as part of the sale negotiation
• If recalled, the £70,000 returns to the SSAS investment pool — which is positive for the fund

We recommended that James and his brother agree with their solicitors to have the loan repaid to the SSAS as part of the completion funds. This would bring the liquid investment portfolio to approximately £460,000.

The Commercial Property

The industrial unit leased to the company raised a more complex question. Options included:

1. Sell the property before or after completion — proceeds return to the SSAS as cash
2. Transfer the lease to the new owner post-sale — the SSAS continues to receive rental income from the new business
3. Retain the property and find a new tenant if the buyer doesn’t want to continue the lease

The buyer indicated they were willing to continue the lease at market rent (£18,000 per year). This was attractive — commercial property within a SSAS generates rental income that accumulates tax-free within the scheme. James and his brother could continue to receive this rental income as a return on the SSAS’s property investment, independent of the business sale.

Should James Transfer the SSAS to a SIPP?

James had heard from a friend that SIPPs were more flexible for retirement income — and wondered whether to transfer his SSAS funds into a personal SIPP after the sale. We analysed this carefully.

Arguments for Transferring to a SIPP

• A SIPP has a wider range of investment options (platform funds, ETFs, investment trusts)
• No need to maintain a SSAS with professional trustee services (which cost £1,500–£3,000 per year)
• Easier administration for James as a sole retiree if his brother remains active
• Some modern SIPPs have lower annual charges for portfolio-only arrangements

Arguments Against Transferring to a SIPP

• The SSAS holds commercial property worth £280,000 — this cannot be transferred in specie to a standard SIPP (most SIPPs do not accept commercial property). It would have to be sold first, triggering a valuation event and potentially impacting sale price
• The commercial property generates £18,000/year rental income, tax-free within the SSAS — a predictable, inflation-linked income stream post-sale
• Transferring from an occupational scheme (SSAS) to a personal pension (SIPP) is an irreversible step — you cannot transfer back
• SSAS annual management costs (circa £2,000–£2,500/year) are not materially higher than a high-value SIPP (0.3%–0.5% on £740k = £2,200–£3,700/year)
• The SSAS already has a history of performance and regulatory compliance — no setup costs

Our Recommendation

We recommended that James retain the SSAS for the commercial property and a core investment portfolio, and consider a partial transfer of any excess investment funds to a SIPP only if administrative simplicity became a priority in later years. The rental income from the property within the SSAS was too valuable to surrender.

The Deferred DB Pension: Should James Transfer?

James’s deferred DB pension (CETV £42,000, income £2,200/year from 65) required a separate analysis. This is a relatively small defined benefit scheme — but the FCA rules still require regulated advice before any transfer where the CETV exceeds £30,000.

We applied the Transfer Value Analysis (TVA) framework:

• CETV: £42,000
• Projected income: £2,200/year from age 65 (7 years away)
• Assumed RPI revaluation in deferment: ~2.5% per annum
• Projected income at 65 (allowing for revaluation): approximately £2,600/year
• Required Rate of Return (RRR): approximately 5.9%

The RRR of 5.9% is above the typical “prudent” threshold of 4%–5% (the level at which a diversified investment portfolio can be expected to grow over the long term, net of charges, without taking undue risk). This means that to match the guaranteed DB income by investing the £42,000 CETV, James would need to consistently achieve 5.9% net annual growth — which is achievable but not guaranteed.

Our Recommendation: Retain the Deferred DB Pension

Given:

• The RRR (5.9%) is above the prudent threshold
• James already has a large SSAS (£740,000) — adding a further £42,000 to drawdown doesn’t materially change his retirement position
• The DB scheme provides inflation-linked income for life — a natural hedge against longevity
• James’s wife (56) would receive a spouse’s pension if James died (usually 50% of member’s pension for public or occupational schemes)

We recommended James retain the deferred DB pension and begin drawing it from age 65 as a guaranteed income floor alongside his SSAS drawdown strategy.

Tax-Free Cash Planning (Lump Sum Allowance)

Under current rules (2025/26), James could take up to £268,275 as a tax-free Pension Commencement Lump Sum (PCLS) — the Lump Sum Allowance (LSA) established after the abolition of the Lifetime Allowance in April 2024.

James’s total pension wealth is approximately £782,000 (£740,000 SSAS + £42,000 deferred DB). He could therefore take 25% of the SSAS investment portfolio as tax-free cash on retirement, up to the £268,275 LSA.

25% of £460,000 (liquid investments post-loan repayment) = £115,000 — well within the LSA.

Retirement Income Strategy (Ages 58–67+)

With the business sale expected to complete when James was approximately 59, we modelled a phased income strategy:

Phase 1: Ages 59–64 (Pre-State Pension)

• SSAS rental income: £18,000/year (commercial property lease, tax-free within SSAS then withdrawn as pension income)
• SSAS flexi-access drawdown (investment portfolio): £18,000–£22,000/year from the liquid investment pool
• Pension Commencement Lump Sum (PCLS): £115,000 tax-free at retirement — could be used to clear any remaining mortgage, fund early retirement lifestyle, or be invested in ISA (up to £20,000/year)
• Total income target: £36,000–£40,000/year (taxable element = drawdown income; rental income within SSAS is not taxable until withdrawn)

Phase 2: Ages 65–66 (Deferred DB activates)

• Deferred DB income: ~£2,600/year (from age 65, after RPI revaluation)
• SSAS drawdown reduced: Slightly lower drawdown needed to maintain same income target
• SSAS rental income: Continues at £18,000+/year

Phase 3: Age 67+ (State Pension commences)

• State Pension: James had 32 qualifying NI years — full new State Pension £11,502/year (2024/25 rate)
• SSAS drawdown further reduced — preserving fund for estate/longevity
• Total income from 67: Approximately £32,100/year (State Pension + DB + SSAS drawdown)

The 2027 Pension IHT Changes: Impact on the SSAS

James had read about the proposed changes to pension Inheritance Tax (IHT) rules, scheduled from April 2027. Under current proposals, unspent pension funds remaining on death will be brought within the deceased’s estate for IHT purposes. This would apply to SIPPs and some other pension arrangements.

For James’s SSAS, the position is slightly more nuanced:

• The SSAS is a trust-based occupational scheme — the rules on how its assets are treated for IHT on death are different from a personal pension (SIPP)
• However, the government’s proposals indicate that all pension death benefits (including occupational schemes) may be brought within scope from 2027
• If this happens, any unspent SSAS funds on James’s death would be subject to IHT alongside other estate assets

Our recommendation was to:

1. Prioritise SSAS drawdown over other assets (ISA, savings) from age 59 onwards — drawing down the pension first, leaving ISA wealth to heirs (ISAs remain outside estate for IHT)
2. Ensure death benefit nominations are up to date (currently his wife is sole beneficiary — this avoids IHT on first death via spousal exemption)
3. Review the position in 2027 once the legislation is confirmed — specific SSAS trustee guidance may be needed at that point

Key Lessons From James’s Case

James’s situation highlights several planning points that are especially relevant for company directors approaching retirement:

1. A SSAS does not have to close when you sell your business. The scheme can continue as a standalone trust — but you’ll need to review the sponsoring employer provisions and any outstanding loans well in advance of completion.
2. Commercial property in a SSAS is a powerful income generator. If the buyer is willing to continue a lease, the rental income within the SSAS grows tax-free — often making it worth retaining rather than selling the property to fund a transfer.
3. Company loans must be repaid or assigned on sale. This should be flagged to your solicitors and incorporated into completion planning — not left as an afterthought.
4. The SSAS vs SIPP decision is not automatic. Many directors assume a SIPP is simpler at retirement — and it sometimes is — but the value of holding commercial property or maintaining multiple member benefits can outweigh the administrative savings.
5. A small deferred DB pension has more value than its CETV suggests. James’s £42,000 CETV generates a guaranteed, inflation-linked income for life. That guarantee has a value that often exceeds the raw transfer value once longevity risk is factored in.
6. Income sequencing matters. Drawing pension funds first (especially post-2027 IHT changes) and preserving ISA wealth as a legacy-efficient asset can make a significant difference to the estate’s overall tax position.
7. Get advice before the business sale completes. The interaction between the SSAS, the business sale proceeds, and James’s personal income plan required pre-completion planning. Leaving pension decisions until after completion risks rushed, suboptimal choices.

Seeking Professional Advice

Every company director’s pension situation is unique. The interaction between a SSAS, a business sale, deferred DB rights, and personal income planning requires specialist knowledge across occupational pension law, tax, and retirement income planning. The decisions made before a business sale — especially regarding loan repayment, property retention, and benefit nominations — can have lasting consequences.

If you are a company director approaching retirement or considering a business sale, and you have a SSAS or other pension arrangement, it is worth seeking regulated advice well before the transaction completes. A qualified Pension Transfer Specialist can help you model your retirement income, analyse any defined benefit transfer options, and structure your pension alongside the sale proceeds.

Frequently Asked Questions

What happens to a SSAS when I sell my business?

A SSAS does not have to close when the sponsoring employer is sold. As a trust-based occupational scheme, it can continue independently. However, you will need to address any outstanding scheme loans (which must be repaid or assigned), review the commercial property lease arrangements, and consider whether to appoint a new sponsoring employer or continue the scheme as a standalone trust. Early planning — ideally 12–18 months before sale — is strongly recommended.

Should I transfer my SSAS to a SIPP when I retire?

This depends on what the SSAS holds and your retirement objectives. If the SSAS contains commercial property generating rental income, or has multiple members with different retirement timelines, transferring to a SIPP may not be the most efficient option. SSAS annual costs are often comparable to a full SIPP for high-value funds. An independent analysis of the costs, benefits, and flexibility of both options is advisable before making this decision.

Can a SSAS hold commercial property after the business is sold?

Yes. A SSAS can continue to hold commercial property after the sponsoring employer is sold, provided the property is leased to another business at market rent. If the buyer continues the lease, the rental income accrues within the SSAS tax-free. The trustees (members) retain control of the property as part of the scheme’s investment portfolio.

Do I need regulated advice to transfer a deferred DB pension if I have a SSAS?

Yes. If your deferred defined benefit (DB) pension has a Cash Equivalent Transfer Value (CETV) of £30,000 or more, FCA rules require you to take regulated advice from a qualified Pension Transfer Specialist before any transfer — regardless of the size of your SSAS or other pension savings. This applies even if the DB transfer would only be a small part of your overall pension planning.

How will the 2027 pension IHT changes affect a SSAS?

Under proposals announced in October 2024, unspent pension funds — including those held in SIPPs and potentially occupational schemes such as a SSAS — may be brought within the deceased’s estate for IHT purposes from April 2027. The precise treatment of SSAS death benefits under these rules is still under consultation. SSAS trustees should seek specialist advice as the legislation develops, and consider income sequencing strategies (drawing pension funds first, preserving ISA wealth) as a planning measure in the meantime.