Investment in intellectual property via a SSAS

SSAS, A small self administered scheme is a pension scheme established by the operators of a business, who appoint themselves as members and trustees. They dictate investment policy and ultimately benefit from the proceeds. That investment policy can range from investing money in shares to loans to the business.
A SSAS can purchase an asset from a member or a third party. If the individual or business owns that asset, it may be contributed into the pension scheme and tax relief can be obtained on the payment. Income from royalty is received tax free and a quarter of those funds received can be paid out without deduction of tax to the member of the scheme. The balance can be paid as income from age 50/55 and payable for life from say, royalties received by the SSAS.
Provided that the intellectual property does not have a predictive lifespan of less than 51 years, it may be an acceptable investment by the SSAS.
Case Example
Catherine is a recording artist and owns the licence and marketing rights to her new album called "The Album" via her Company, Catherine & Co Ltd. A valuation of The Album is undertaken which on sales to date plus projected income is £500,000. Catherine & Co Limited last year had pre tax profits of £400,000 and this year the figures are similar. After taxation and financial advice was given, 50% of the rights to the licence was contributed to Catherine's SSAS. This tax deductible payment reduced pre-tax profits by £250,000, giving a tax relief of £52,500.
The SSAS now owns half of the licence and copyright to The Album.
The income stream to The Album over the next 10 years amounted to £375,000, of which the SSAS received half of that royalty income. The amount being £187,500. Catherine was able to take £46,875 tax free at age 50 from the SSAS, the balance of the fund continues to pay her an income. Had that licence remained in the Company, the business would have incurred a corporation tax cost of £39,375, in addition to income tax on the dividend of £75,817 (based on current tax rates) for Catherine.
About SSAS:
SSAS is a pension scheme established by the operators of a business who act as members and trustees. They dictate investment policy and directly benefit from the proceeds. By having a pension scheme loan to a business from a SSAS, the small business not only gets tax breaks on interest repayments but the pension scheme loan terms and conditions can be set favourably by the SSAS.
You can contribute and sell assets from your business to your SSAS which, in addition to building a retirement fund for you, could also ring-fence your assets against business creditors.

There remains substantial differences between SSAS and SIPP. In SSAS, the employer usually acts scheme provider. A business such as a limited company or partnership may be the scheme provider. On the other hand the SIPP provider is traditionally a financial house, such as a bank, building society, insurance company. However, this was extended by the FSA.

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