Business Valuations
for SSAS Pension
Trustees

A SSAS loanback is where the pension scheme lends money to the sponsoring employer. HMRC rules require that any loan to a connected party is made on commercial terms and is secured against assets of equivalent value. An independent valuation of the business or the assets being used as security is the principal document trustees use to demonstrate that the loan amount does not exceed the open market value of the security. Without it, the transaction risks being classified as an unauthorised payment, which carries substantial tax penalties for scheme members and trustees alike.

HMRC rules cap a SSAS loanback at 50% of the net assets of the scheme at the time of the loan. The loan must be secured by a first charge over assets of at least equivalent value, carry interest at a commercial rate (at least 1% above the base rate), have a defined repayment schedule of no more than five years, and be documented with a formal loan agreement. The valuation is needed to confirm that the assets offered as security are genuinely worth at least the amount being borrowed.

We can do either, or both. In most SSAS loanback situations, trustees want a valuation of the business as a going concern to confirm overall open market value, and separately a schedule of the assets being charged as security. We structure the report to address whichever combination your scheme administrator and legal advisers require. We discuss the specific requirements with you at the outset so the report is fit for purpose before we start work.

HMRC does not pre-approve SSAS loanback transactions. However, the scheme must be able to demonstrate compliance with HMRC’s connected-party rules if the transaction is reviewed. The independent valuation sits on the scheme file and is the primary evidence that the loan was made on commercial terms. Scheme administrators will not process the transaction without it, and HMRC’s pension schemes compliance team will ask for it if the scheme is ever subject to review.

Most SSAS valuation reports are delivered within seven to ten business days of receiving the necessary financial information. We typically need three to five years of statutory accounts, recent management accounts, details of the loan structure and proposed security, and a brief description of the business and its trading model. We will send you a clear document request list at the start of the engagement so nothing delays the process unnecessarily.

We work on a fixed-fee basis agreed before any work begins, so there are no surprises. The fee depends on the size and complexity of the business being valued. We discuss this in the initial conversation and will confirm a fixed figure in writing before you commit to anything. For most UK SME loanback valuations, fees start from £1,500 plus VAT. Contact us to discuss your specific situation and we will give you a clear number straight away.

We produce business valuations, not property valuations. If your SSAS is purchasing commercial property from a connected party, you will need a RICS-qualified surveyor for the property valuation. However, if the transaction also involves a business element, for example, the property is the main operating asset of the connected company, we can provide a business valuation alongside the property valuation to give trustees a full picture of open market value. We are happy to discuss your specific circumstances and point you towards the right type of report.