The SSAS Trustee Approval Process for Property Purchases

Why Trustee Approval Is Non-Negotiable

In an SSAS, no significant investment decision can be made unilaterally by one trustee. Pension trust law and the scheme's own rules require collective trustee agreement for major transactions. Commercial property purchases — typically among the largest investments an SSAS will ever make — require the most rigorous trustee approval process.

The approval process serves two purposes: it ensures the transaction is in members' best interests (the trustees' fiduciary duty) and it ensures the transaction complies with HMRC's rules for registered pension schemes (the governance duty). Both are non-negotiable.

Pensioneer trustees play a pivotal role in this process. They are not mere witnesses — they are governance gatekeepers who can and should refuse to sanction a transaction they believe is non-compliant.

Who Must Approve the Transaction?

For an SSAS property purchase, approval is required from:

• All member-trustees: Each director/member who is a trustee of the scheme must agree to the purchase
• The pensioneer trustee: The independent professional trustee who provides governance oversight must formally approve the transaction

In practice, member-trustees typically agree informally early in the process (when the offer is made). The pensioneer trustee's formal approval comes later — after the RICS valuation is available and the mortgage offer is in hand — as this is when they can properly assess the transaction's compliance.

Stage 1: Initial Trustee Agreement (Before Offer)

Before making an offer on a property, the member-trustees should agree collectively that:

• The property is consistent with the scheme's investment policy
• The scheme has (or can obtain) sufficient funds to complete the purchase
• The property is a commercial (non-residential) property within the SSAS's permitted investment powers
• The proposed purchase price is broadly consistent with market value (to be confirmed by RICS)

This initial agreement need not be a formal resolution — an email chain confirming agreement is sufficient at this stage. But it should be documented for the scheme's records.

Stage 2: Notifying the Pensioneer Trustee

As soon as an offer is accepted, the pensioneer trustee should be notified. They will want to know:

• The property address and description
• The proposed purchase price
• Whether any borrowing is proposed (and if so, the proposed loan amount)
• Whether the transaction involves a connected party (including the sponsoring employer as vendor)
• The proposed lease arrangements post-purchase

The pensioneer trustee may raise preliminary concerns at this stage — for example, if the proposed borrowing would exceed 50% of the scheme's NAV, or if the property type raises any compliance questions. Better to surface these early than to discover a fundamental problem close to exchange.

Stage 3: The Formal Approval Package

The formal approval process typically occurs once all of the following are available:

• The RICS Red Book valuation report
• The solicitor's title report and summary of legal due diligence findings
• The mortgage offer (if borrowing is required)
• Draft lease terms (if a new lease is being granted)

The pensioneer trustee reviews this documentation package and confirms that the transaction meets HMRC's requirements. Specifically, they will check:

• Valuation compliance: The RICS valuation confirms the purchase price reflects open market value
• Rent compliance: The proposed lease rent is at (or above) open market rental value as confirmed by the RICS surveyor
• Borrowing compliance: The mortgage does not cause the SSAS's total borrowing to exceed 50% of NAV
• Connected party compliance: If the vendor is a connected party, all additional requirements have been met
• Investment powers: The property type is within the SSAS's permitted investments

Matt Lenzie notes: "A well-prepared approval package — with the RICS report, solicitor's summary, and mortgage offer all in order — should receive pensioneer trustee approval within a few days. The delays occur when trustees submit incomplete or inconsistent information that requires follow-up questions. Preparation pays off."

Stage 4: Formal Trustee Resolution

Once the pensioneer trustee is satisfied, the member-trustees pass a formal trustee resolution approving the purchase. This resolution should record:

• The property address and description
• The purchase price and the RICS valuation figure supporting it
• The proposed funding structure (cash from scheme + mortgage)
• The proposed lease terms
• The date of the resolution and the signatures of all trustees

The pensioneer trustee also signs the resolution (or provides separate written approval). This creates a formal governance record that the purchase was properly authorised.

Stage 5: Signing the Contract

With the trustee resolution in place, the trustees can authorise their solicitor to exchange contracts. All trustees — including the pensioneer trustee — must sign the contract as purchasers (or authorise the solicitor to sign on their behalf by way of a power of attorney).

What Can Delay or Prevent Pensioneer Trustee Approval?

Common reasons for pensioneer trustees to delay or withhold approval include:

• Purchase price above the RICS valuation (must be resolved before exchange)
• Proposed rent below the RICS assessed market rent (must be corrected)
• Proposed borrowing that would breach the 50% NAV limit (must reduce the loan or increase the scheme assets)
• Property type raising questions about HMRC compliance (e.g., mixed-use property with residential element)
• Connected party transaction without adequate evidence of arm's-length terms
• Outstanding legal due diligence matters that have not been resolved

Ongoing Approval Requirements

Trustee and pensioneer trustee approval is not just a one-off requirement at purchase. Ongoing transactions related to the property also require approval:

• Rent reviews (trustees must approve the new rent agreed)
• Lease renewals (new lease terms require trustee resolution)
• Significant capital expenditure on the property
• Changes to the borrowing structure (refinancing)
• Sale of the property

"The pensioneer trustee approval process is not bureaucracy — it is the governance safeguard that keeps SSAS schemes out of trouble with HMRC and protects members' retirement savings. Trustees who work with their pensioneer trustee proactively, rather than treating them as an obstacle, consistently have smoother transactions."

— Matt Lenzie, Former Banker & Corporate Finance Partner

Key Takeaways

• Commercial property purchases require formal approval from all member-trustees and the pensioneer trustee
• Notify the pensioneer trustee as soon as an offer is accepted — early notification prevents late-stage surprises
• The formal approval package should include the RICS valuation, solicitor's title report, mortgage offer, and draft lease terms
• The pensioneer trustee checks valuation compliance, rent compliance, borrowing limits, and connected party matters
• A formal trustee resolution must be passed and signed by all trustees before exchange of contracts
• Ongoing property transactions (rent reviews, lease renewals, sales) also require trustee approval

For help structuring SSAS property finance that will satisfy both lenders and pensioneer trustees, contact our team or explore our SSAS property mortgage page.