Both the Ssas and self-invested personal pension markets were no stranger to court drama last year, and the consequences will continue to unfold over the next 12 months. During 2017, both Berkeley Burke and Carey Pensions were unsuccessful in their respective court cases. Both of those centred on the Sipp market, but Ssas are not immune from the potential repercussions.
Meanwhile, the outcome of the battle between HMRC and Sippchoice involving in-specie contributions – where assets are used instead of cash – affects Ssas, too. Historically, companies had claimed tax relief on such contributions, but in 2016 HMRC challenged this, blocking tax relief on 26 schemes as a result. Sippchoice successfully opposed this ruling with the first tier tax tribunal, but the Revenue has subsequently launched an appeal of its own, due to take place in May.
If HMRC is ultimately successful, then cash would be the singular contribution means of achieving tax relief. Given that a key attraction of Ssas is the facility to transfer and invest in commercial property, providers will attentively be awaiting the outcome.
Stephen McPhillips, technical sales director at Dentons Pension Management, says: “Although not regulated by the FCA, Ssas might be impacted by the current court cases affecting Sipp providers where the Ssas provider also operates a Sipp. Some Sipp and Ssas providers may not be in a position to meet the challenges facing them and might be forced to close or sell their books to a willing buyer.
“Ssas are sometimes promoted as a vehicle of choice for pushing the boundaries of tax planning – especially around very large contributions. This is a concern for the market as a whole if Ssas arrangements are seen as side-stepping legislation.”
Fresh challenges
Even with these problems, Ssas still retain their place as an important consideration for retirement planning, as the pros still far outweigh the cons for many advisers. Table 2 supports this: funds under management remained broadly the same last year, with many providers recording a slight uptick.
All but one firm, Rowanmoor, exclusively hold their own funds instead of also accommodating third-party access. On an individual level, one notable increase in assets under management over the past year has been enjoyed by Curtis Banks, which has seen assets rise almost £100m to £350m. But this has not been due to organic growth as it added 16 plans in total.
Other companies that have also beefed-up AUM are Day Cooper Day, Dentons and Talbot and Muir. Dentons, which acquired Sippchoice last year, has seen this figure jump almost 20 per cent to just shy of £1.3bn.
