Accessing HL SIPP
Discussion
My wife has a small SIPP with HL - 21k.
She's over 55 with no other earnings for this tax year and probably the next.
It seems straightforward that she can access the money totally tax free over this year and next.
This year she could take £5250 as a tax free sum (25% of full post) plus £12,500 as tax free allowance.
Then after April take the remaining £3250.
However I'm not clear on the actual logistics of getting the cash tax free. Is it possible to so this without paying and reclaiming tax (or emergency tax) or does she need to pay and reclaim.
Also is is OK to take the full £5250 this year or is she restricted to 25% of what she is taking out this year. (ie take £16,666 of which $4,666 is tax free lump sum and £12,500 is tax allowance)
Her ideal would be to ask HL just to transfer to a general fund and share account from her SIPP but that seems too simple.
Thanks in advance.
She's over 55 with no other earnings for this tax year and probably the next.
It seems straightforward that she can access the money totally tax free over this year and next.
This year she could take £5250 as a tax free sum (25% of full post) plus £12,500 as tax free allowance.
Then after April take the remaining £3250.
However I'm not clear on the actual logistics of getting the cash tax free. Is it possible to so this without paying and reclaiming tax (or emergency tax) or does she need to pay and reclaim.
Also is is OK to take the full £5250 this year or is she restricted to 25% of what she is taking out this year. (ie take £16,666 of which $4,666 is tax free lump sum and £12,500 is tax allowance)
Her ideal would be to ask HL just to transfer to a general fund and share account from her SIPP but that seems too simple.
Thanks in advance.
I may be completely wrong here BUT
As I understand it, they (the SIPP Co, in this case HL) used to deduct the tax when they paid out. Now I think they pay gross, they'll contact HMRC to advise and HMRC will send a revised tax code with an "estimation" of what you'll pay. (This has happened to me)
Not sure how they'll do it if there's no tax to pay. May be worth speaking direct to HL.
As I understand it, they (the SIPP Co, in this case HL) used to deduct the tax when they paid out. Now I think they pay gross, they'll contact HMRC to advise and HMRC will send a revised tax code with an "estimation" of what you'll pay. (This has happened to me)
Not sure how they'll do it if there's no tax to pay. May be worth speaking direct to HL.
I haven't earned any taxable income this year and today have had £1300 paid from my SIPP and have had tax deducted.
I believe your SIPP have to deduct the tax regardless of your tax position so do not withdraw a large taxable amount from your SIPP in one go.
You can take the 25% upfront of the whole lot in one go in addition to your 12.5k tax free allowance.
I believe your SIPP have to deduct the tax regardless of your tax position so do not withdraw a large taxable amount from your SIPP in one go.
You can take the 25% upfront of the whole lot in one go in addition to your 12.5k tax free allowance.
Edited by Mazinbrum on Thursday 3rd September 09:47
In my experience, and that of a friend, income tax is deducted by the SIPP company whether or not you're required to pay it (apart from the 25% lump sum). If you're not, HMRC will refund it after a few months. It came as a shock to take £9K from my 'account' and find 20% was deducted, it was like being employed again! All square now.
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