Jose and Maria
The Bakers

A baking success

Jose and Maria run a baker’s shop located in the Bullring, Birmingham. They produce great artisan bread and have been approached to deliver bread into local restaurants which they have connected to via Retirement Capital’s business growth network.

To meet demand they need to buy more equipment and a bigger van. Jose and Maria need £23,000 to fund the investment. Their bank wants personal guarantees on a loan, which they do not wish to provide as if it all goes wrong, they are worried that their bank can come after their home.

After speaking with Paul at Retirement Capital, Jose and Maria consent for Paul to speak with their accountant. They have pension assets of £30,000 from other pension schemes and £40,000 in the business. They do not want to use all their operating cash to fund this expansion. The business is worth around £40,000, inclusive of equipment.

Paul at Retirement Capital and their accountant work together on a solution where Jose and Maria will consolidate their pension money together, which is worth £30,000. They will pay £23,000 as a pension contribution from their business to their SSAS. The £23,000 contribution earns them tax relief of £4370 in their business.

Jose and Maria’s SSAS is now worth £53,000, which is made up of £23,000 pension contribution and in-specie transfers of other pensions they hold worth £30,000. The pension scheme lends £23,000 to the business for the acquisition of a van and more equipment.

The balance of money in their SSAS is kept invested in investment funds and because their existing pensions were transferred “in-specie”, Retirement Capital’s technology means that they have not had to sell their pension investments to fund the expansion.

Outcome: Fund our business expansion, don’t encash our other pension money. Save our business from a new tax bill.