Thinking about using your SSAS to fund your business? You’re not alone. A SSAS (Small Self-Administered Scheme) loanback is one of the most powerful tools available to UK business owners, offering tax-efficient access to capital while keeping wealth inside your pension structure.
But with great power comes strict rules. One wrong move could trigger heavy tax penalties or put your pension at risk. That’s why it’s essential to understand the fine print before you borrow.
At GoldHouse, we help developers, entrepreneurs and property investors use SSAS loanbacks strategically, avoiding costly mistakes while accelerating business growth.
Let’s explore the 5 most common SSAS loanback mistakes and how to avoid them.
It’s Powerful But It’s Not Foolproof
A SSAS loanback allows your pension to lend up to 50% of its value to your limited company. It’s a legitimate, HMRC-approved strategy but only when done by the book.
Missteps can result in unauthorised payment charges of up to 55% or worse, the loan being voided altogether.
Mistake #1: Breaching the 50% Loan Limit
You can only loan up to 50% of the SSAS’s net asset value at the time of the loan. This includes all scheme assets, not just cash.
What we often see:
- People forgetting to include illiquid assets (like commercial property)
- Not revaluing before drawdown
- Assuming “close enough” is good enough, it’s not
Why it matters: Breaching the 50% limit leads to automatic tax penalties. We always recommend a formal valuation and trustee review before initiating a loanback.
Mistake #2: Using the Funds for Personal Use
A SSAS loan must be made to a trading limited company, not to you personally and the funds must be used for legitimate business purposes only.
That means no:
- Buying personal property
- Settling personal debts
- Gifting the loan to others
Why it matters: Personal benefit is strictly prohibited under pension rules. HMRC will treat this as an unauthorised payment, and your entire scheme could be at risk.
Mistake #3: Inadequate or Unregistered Security
Every SSAS loanback must be secured with a first charge over an asset of equal or greater value, typically property, land or business assets.
What people get wrong:
- Using unsuitable security (e.g. personal assets, goodwill)
- Not registering the charge at Companies House
- Assuming a second charge is enough (it isn’t, unless jointly registered with another lender)
Why it matters: If the loan isn’t properly secured, HMRC won’t see it as valid and again, you could face serious tax charges.
Mistake #4: Ignoring Interest Payments or Terms
HMRC requires:
- A fixed interest rate of at least 1% above base
- A maximum term of 5 years
- Equal annual or monthly repayments covering both interest and capital
Some business owners:
- Miss repayments
- Set rates too low
- Forget to document terms
Why it matters: Even small breaches of loan terms can trigger compliance issues. At GoldHouse, we structure your loan to meet all criteria and integrate repayment tracking into your business plan.
Mistake #5: Mixing SSAS Loanbacks with Unapproved Strategies
It’s tempting to combine your SSAS loan with other funding but be careful.
Common errors:
- Using the loan as a deposit for unrelated property purchases
- Combining loanbacks with unregulated investments
- Structuring deals that indirectly benefit trustees
Why it matters: HMRC scrutinises how pension funds are used. If there’s any indirect personal gain or conflict of interest, the loan may be disqualified.
How to Stay Safe While Maximising Value
SSAS loanbacks are powerful but only when handled by professionals who know the rules inside out.
At GoldHouse, we:
- Handle all SSAS setup and trustee management
- Structure your loanback compliantly
- Ensure your business plan aligns with pension rules
- Protect your tax position and long-term wealth
Whether you’re growing a property portfolio, launching a new venture or scaling an existing business, we’ll help you unlock your pension, without the risk.
Use Your SSAS the Right Way, With Expert Guidance
Ready to fund your business through your SSAS, the smart way?
Book a strategy call with GoldHouse today and explore how we help clients access capital, reduce tax, and build lasting legacy wealth.
