SIPP & Pension guidance - IM Private Clients

[Countdown]

Hi all - apologies if this has already been asked.

Assuming I have a SIPP with (let's say) £100k after Ive drawn down the 25% lump sum.

if I was to pop my clogs

1. Does the whole amount transfer to my wife?
2. can she withdraw £12k a year without paying any tax (assuming she has no other source of income)

[JulianPH]

Jackals said:

Does anyone know where i can find your portfolio cost & charges for the year?

Hi Jackles

It is on all of the following pages of our website;

Self Select/Portfolios:

https://www.intelligentmoney.com/portfolios



Investment Styles:

https://www.intelligentmoney.com/investment-styles



And, of course, charges:

https://www.intelligentmoney.com/copy-of-self-sele...




Obviously these are also in our Key Features & T&C documents, which can be found here;

https://www.intelligentmoney.com/literature-librar...


Cheers

Julian

PS I have no idea why one of those URLs is mislabelled and will have that fixed!

[Jackals]

JulianPH said:

Jackals said:

Does anyone know where i can find your portfolio cost & charges for the year?

Hi Jackles

It is on all of the following pages of our website;

Self Select/Portfolios:

https://www.intelligentmoney.com/portfolios



Investment Styles:

https://www.intelligentmoney.com/investment-styles



And, of course, charges:

https://www.intelligentmoney.com/copy-of-self-sele...




Obviously these are also in our Key Features & T&C documents, which can be found here;

https://www.intelligentmoney.com/literature-librar...


Cheers

Julian

PS I have no idea why one of those URLs is mislabelled and will have that fixed!

Hi Julian,

Thank you, would there been an appetite in the future to add a cost & charges button to the dashboard in the future? As in you could select your own dates and it would given you the monetary amount and percentage across your total portfolio.

No worries if not.

Kind Regards,

J

[JulianPH]

Jackals said:

Hi Julian,

Thank you, would there been an appetite in the future to add a cost & charges button to the dashboard in the future? As in you could select your own dates and it would given you the monetary amount and percentage across your total portfolio.

No worries if not.

Kind Regards,

J

Hi Jackals

It is certainly possible. We are looking at some changes to this software anyway, so I'll add this to the list!

Cheers

[pingu393]

pingu393 said:

What does IM think? Is 4.43% a realistic expectation of average annual growth over 41 years?

https://www.google.co.uk/search?q=average+annual+i...

It looks like it's definitely achievable .

[PM3]

pingu393 said:

pingu393 said:

What does IM think? Is 4.43% a realistic expectation of average annual growth over 41 years?

https://www.google.co.uk/search?q=average+annual+i...

It looks like it's definitely achievable .

A completely spurious opinion on my part , but ....I'd suggest that the supposition is good and a LOT better than the chance of those NI contributions being "worth the paper they are written on " in 40 plus years time. ?

[Car bon]

Countdown said:

Hi all - apologies if this has already been asked.

Assuming I have a SIPP with (let's say) £100k after Ive drawn down the 25% lump sum.

if I was to pop my clogs

1. Does the whole amount transfer to my wife?
2. can she withdraw £12k a year without paying any tax (assuming she has no other source of income)

Assuming she is your nominated beneficiary, then yes. Technically the scheme administrators have the final say on who receives it - and it could be contested - or she could request it's passed directly to someone else, like kids.

If you are under 75 when you die, then the whole lot is tax free. If you're over 75 then the recipient would pay tax on it as though it was income - so could draw 12,570 until state pension kicks in etc.

ETA - https://www.hl.co.uk/help/sipp,-drawdown-and-annui...

Edited by Car bon on Friday 15th December 15:51

[supersport]

Irrespective of what you've drawn already.

[markiii]

Jackals said:

JulianPH said:

Jackals said:

Does anyone know where i can find your portfolio cost & charges for the year?

Hi Jackles

It is on all of the following pages of our website;

Self Select/Portfolios:

https://www.intelligentmoney.com/portfolios



Investment Styles:

https://www.intelligentmoney.com/investment-styles



And, of course, charges:

https://www.intelligentmoney.com/copy-of-self-sele...




Obviously these are also in our Key Features & T&C documents, which can be found here;

https://www.intelligentmoney.com/literature-librar...


Cheers

Julian

PS I have no idea why one of those URLs is mislabelled and will have that fixed!

Hi Julian,

Thank you, would there been an appetite in the future to add a cost & charges button to the dashboard in the future? As in you could select your own dates and it would given you the monetary amount and percentage across your total portfolio.

No worries if not.

Kind Regards,

J

that would be useful

[Countdown]

Car bon said:

Countdown said:

Hi all - apologies if this has already been asked.

Assuming I have a SIPP with (let's say) £100k after Ive drawn down the 25% lump sum.

if I was to pop my clogs

1. Does the whole amount transfer to my wife?
2. can she withdraw £12k a year without paying any tax (assuming she has no other source of income)

Assuming she is your nominated beneficiary, then yes. Technically the scheme administrators have the final say on who receives it - and it could be contested - or she could request it's passed directly to someone else, like kids.

If you are under 75 when you die, then the whole lot is tax free. If you're over 75 then the recipient would pay tax on it as though it was income - so could draw 12,570 until state pension kicks in etc.

ETA - https://www.hl.co.uk/help/sipp,-drawdown-and-annui...

Edited by Car bon on Friday 15th December 15:51

Perfect - thanks.

Unfortunately due to raising our 4 kids she doesn't have a State pension (yet - she has about 20 years left so still sufficient time to accrue). She'll get 50% of my DB pensions when I kick off this mortal coil and I just wanted to make sure she could withdraw my SIPP money whilst paying the minimum amount of tax.

[Yorkshire Dangermouse]

AdamIM said:

Yorkshire Dangermouse said:

AdamIM said:

markiii said:

i may be wrong but I thinbk youll get 20% on that regardless in teh same way someone not working and paying the minimal amount they are allowed still gets 20% releif

I'll check with Nik but my understanding is a Net scheme will result in no additional relief(20%) whereas a relief at source scheme, will. So in this case. No.

Many thanks Adam - the £10k doesn't need to be paid into my former employer's Net Pay scheme, I can pay into another (IM?) pension if that means it attracts 20% tax relief.

Quite possibly. It’s all about the scheme. We can check that

Just to provide the answer on this one: confirmed that yes, 20% tax relief applies where paid into a relief at source scheme (such as IM), so I'll pay in £8k and get a £2k tax uplift. Happy days.

[supersport]

Countdown said:

Perfect - thanks.

Unfortunately due to raising our 4 kids she doesn't have a State pension (yet - she has about 20 years left so still sufficient time to accrue). She'll get 50% of my DB pensions when I kick off this mortal coil and I just wanted to make sure she could withdraw my SIPP money whilst paying the minimum amount of tax.



Surely she registers for child benefit (or whatever it’s called now) so that she still gets the NI credit?

[Mr Pointy]

I have a question about the MPAA. For this tax year 2023-24 it has gone up from £4,000 to £10,000: does this mean I can transfer £10,000 into my SIPP & £2000 of tax relief will be added or should I only transfer £8,000 & £2000 will be added? I suspect it is the latter but I cannot find confirmation of this.

[pingu393]

Mr Pointy said:

I have a question about the MPAA. For this tax year 2023-24 it has gone up from £4,000 to £10,000: does this mean I can transfer £10,000 into my SIPP & £2000 of tax relief will be added or should I only transfer £8,000 & £2000 will be added? I suspect it is the latter but I cannot find confirmation of this.

If this is true, then I may start to access my pension.

[Rufus Stone]

Mr Pointy said:

I have a question about the MPAA. For this tax year 2023-24 it has gone up from £4,000 to £10,000: does this mean I can transfer £10,000 into my SIPP & £2000 of tax relief will be added or should I only transfer £8,000 & £2000 will be added? I suspect it is the latter but I cannot find confirmation of this.

Yes it's the latter, assuming you have £10,000 of relevant earnings.

[Mr Pointy]

pingu393 said:

Mr Pointy said:

I have a question about the MPAA. For this tax year 2023-24 it has gone up from £4,000 to £10,000: does this mean I can transfer £10,000 into my SIPP & £2000 of tax relief will be added or should I only transfer £8,000 & £2000 will be added? I suspect it is the latter but I cannot find confirmation of this.

If this is true, then I may start to access my pension.

Well it's true that it's gone up to £10k but it looks like that is 8+2.

[leef44]

I have a question about the 25% tax free lump sum on taking the pension. I had built up an AVC to make up the lump sum payment when I took my work pension which are handled together (both have to be taken at the same time). The AVC went towards the 25% tax free lump sum and I did not take any commutation from my final salary scheme (defined benefit scheme).

I didn't get the whole 25% tax free but got over 20% tax free. My pension provider says I won't get the rest tax free. They say that it is close enough and so my monthly pension will be paid without any tax free portion.

Is this normal practice for defined benefit schemes? This is news to me. I thought all schemes get 25% tax free portion such that if you get the whole 25% tax free as a lump sum then you are entitled to get the balance in the monthly pension.

They told me to contact HMRC who they responded with a letter confirming that I am entitled to 25% tax free and the pension provider should administer this at source (HMRC does not do this via PAYE code adjustment, probably because it is an annual variable).

[pingu393]

Rufus Stone said:

Mr Pointy said:

I have a question about the MPAA. For this tax year 2023-24 it has gone up from £4,000 to £10,000: does this mean I can transfer £10,000 into my SIPP & £2000 of tax relief will be added or should I only transfer £8,000 & £2000 will be added? I suspect it is the latter but I cannot find confirmation of this.

Yes it's the latter, assuming you have £10,000 of relevant earnings.

Without the income, your limit is the usual £3600 gross (£2880 cash + £720 from HMRC). IM, or someone else needs to confirm this, as it's my assumption.


Also, you need to make sure that there is a paper trail to show that money taken from the SIPP isn't returned to the SIPP. So, don't move £10k from SIPP to GIA, then follow that up by moving £8k from GIA to the SIPP. HMRC will assume you are a naughty boy. You have to be able to prove that you're not.

In my example, I would be able to show that I had £18k in cash outside the SIPP before I fed the SIPP.

[Car bon]

leef44 said:

I have a question about the 25% tax free lump sum on taking the pension. I had built up an AVC to make up the lump sum payment when I took my work pension which are handled together (both have to be taken at the same time). The AVC went towards the 25% tax free lump sum and I did not take any commutation from my final salary scheme (defined benefit scheme).

I didn't get the whole 25% tax free but got over 20% tax free. My pension provider says I won't get the rest tax free. They say that it is close enough and so my monthly pension will be paid without any tax free portion.

Is this normal practice for defined benefit schemes? This is news to me. I thought all schemes get 25% tax free portion such that if you get the whole 25% tax free as a lump sum then you are entitled to get the balance in the monthly pension.

They told me to contact HMRC who they responded with a letter confirming that I am entitled to 25% tax free and the pension provider should administer this at source (HMRC does not do this via PAYE code adjustment, probably because it is an annual variable).

Not mine. They 'valued' the DB scheme at 20x annual payments - added that to the stand alone scheme - then I got 25% of the total, but all taken from the stand alone scheme. That's why none of the DB pension is tax free as I've already had it.

[leef44]

Car bon said:

leef44 said:

I have a question about the 25% tax free lump sum on taking the pension. I had built up an AVC to make up the lump sum payment when I took my work pension which are handled together (both have to be taken at the same time). The AVC went towards the 25% tax free lump sum and I did not take any commutation from my final salary scheme (defined benefit scheme).

I didn't get the whole 25% tax free but got over 20% tax free. My pension provider says I won't get the rest tax free. They say that it is close enough and so my monthly pension will be paid without any tax free portion.

Is this normal practice for defined benefit schemes? This is news to me. I thought all schemes get 25% tax free portion such that if you get the whole 25% tax free as a lump sum then you are entitled to get the balance in the monthly pension.

They told me to contact HMRC who they responded with a letter confirming that I am entitled to 25% tax free and the pension provider should administer this at source (HMRC does not do this via PAYE code adjustment, probably because it is an annual variable).

Not mine. They 'valued' the DB scheme at 20x annual payments - added that to the stand alone scheme - then I got 25% of the total, but all taken from the stand alone scheme. That's why none of the DB pension is tax free as I've already had it.

This is what I expected but since my standalone scheme is the only lump sum element. This made up 23% of the pension (when taking 20x annual payment for the DB scheme). I then expected the remaining 2% to be administered as tax free element of the DB scheme.

Pension provider says no, that's it, the rest you get as all taxed because that's how we do things in our scheme. They then say that this is normal practice for DB schemes. This is the bit that's new to me and I was wondering if someone can confirm that this is the case and that 25% tax free element is only specific to DC schemes.

Even HMRC has confirmed that I should be entitled to 25% tax free.