Small Self-Administered Schemes (SSAS) are pension schemes for small businesses that offer tax-efficient ways of saving and investing for the future. Many property investors, developers, and small business owners utilise SSAS for various investment activities. Whilst SSAS investments commonly include commercial premises, stocks, shares, and bonds, there's a lesser-known opportunity that might interest those in the supported living sector: investing in certain types of residential property where supported living care is provided. 

SSAS investments must avoid residential property due to strict HMRC regulations. Breaching these rules can result in severe penalties. However, the HMRC pension tax manual outlines specific exceptions where certain types of property are not considered residential if particular conditions are met. 

One such exception applies to some forms of supported living accommodation. This opens up an interesting avenue for SSAS holders interested in the care sector. However, it's crucial to note that not all supported living properties qualify for this exception. 

Key considerations: 

1. Limited Scope: The exception doesn't cover the entire supported living market. For instance, properties providing care for care leavers do not qualify.
2. Specific Cohorts: Only properties catering to certain groups of individuals, as outlined in the HMRC guidelines, are eligible.
3. Children's Homes: Notably, children's homes are often allowable to be held within a SSAS.

Benefits of holding eligible properties in SSAS 

If a supported living property meets the HMRC criteria, holding it within a SSAS can offer significant advantages: 

1. Tax-Free Growth: Any increase in the property's value is free from capital gains tax.
2. Tax-Free Income: Rental income received is tax-free within the SSAS.
3. Business Efficiency: For those already operating in the care sector, this can be a tax-efficient way to own properties used in the business.

Whilst this opportunity exists, it's crucial to approach it with caution: 

1. Consult Your SSAS Administrator: Before making any decisions, always consult with your SSAS administrator. They can provide guidance on whether a specific property meets the necessary criteria.
2. Avoid 'Gaming the System': Attempting to circumvent the rules can result in hefty fines. It's essential to strictly adhere to HMRC guidelines.
3. Seek Financial Advice: This information should not be taken as financial advice. Always consult with a qualified financial adviser before making investment decisions.
4. Stay Updated: HMRC regulations can change, so it's important to stay informed about current rules.

Whilst the possibility of holding certain supported living properties within a SSAS exists, it's a complex area that requires careful navigation. The potential tax benefits are significant, but so are the risks if not done correctly. For those operating in the supported living sector, this could be a valuable investment strategy. However, it's crucial to approach this opportunity with thorough research, professional advice, and strict adherence to HMRC guidelines.  

Remember, the key to successfully incorporating supported living property into your SSAS lies in meticulous planning and expert guidance. 

Within the Gateway team, we have experience in investing using SSAS. If you want to understand more, drop us a line hello@supportedlivinggateway.com