SIPP & Pension guidance - IM Private Clients

[nebpor]

Hopefully they back date the 60K increase to the previous three tax years as well, but I doubt it !

[Claret m]

AdamIM said:

Hi all,

An unofficial news article suggesting the Chancellor will increase the LTA and possibly an increase to the 40k cap (tax relief)

From the BBC
People are expected to be able to save up to £1.8m over a lifetime, up from £1.07m currently.
The policy aims at stop people from reducing their hours or retiring early due to the tax charges.
Persuading workers to work for longer is part of UK plans to boost growth.
The chancellor could also increase the £40,000 annual cap on tax-free contributions to pensions, to £60,000.

Hi Adam

I have been watching this too.
I would be grateful for your thoughts on my position.
I had individual protection 2014, I have crystallised £1.5 million and taken only the PCLS. I still have a large amount in a non-crystallised SIPP. I am hoping that I will be able to take advantage of being able to crystallise the further £300k even though I have used 100% of an old allowance.
What are your thoughts?

Thanks in advance

All the best

[alfaspud]

I’m looking to maximise my pension contributions for this financial year and have a few questions. I'll be using all of this year’s allowance plus carry forward from the previous three years.

Reading through much of this thread I believe that I can pay up to my ‘relevant earnings’ for the year – I understand this is all of my employment income this year.

Does relevant earnings include any BIK e.g. PMI, or interest earned on cash deposits?
Do I need to take into account my personal allowance (I’m a 40% tax payer)?

Earlier this year my role was made redundant, and my enhanced redundancy payment was in excess of 30K.

Does the excess over 30K count as part of my relevant earnings? It went through PAYE and was taxed – I’m assuming the 30k Tax free part doesn’t count towards the relevant earnings.

Lastly, a question for Nik / IM: I am thinking of using my IM S&S ISA to provide the funds for the contribution – either fully or partly depending on the answers to the above.

Do IM allow a direct transfer from an IM ISA to an IM SIPP?
If that’s possible, what’s the process for setting up the transfer?

Thanks in advance. Dave

[AdamIM]

Claret m said:

AdamIM said:

Hi all,

An unofficial news article suggesting the Chancellor will increase the LTA and possibly an increase to the 40k cap (tax relief)

From the BBC
People are expected to be able to save up to £1.8m over a lifetime, up from £1.07m currently.
The policy aims at stop people from reducing their hours or retiring early due to the tax charges.
Persuading workers to work for longer is part of UK plans to boost growth.
The chancellor could also increase the £40,000 annual cap on tax-free contributions to pensions, to £60,000.

Hi Adam

I have been watching this too.
I would be grateful for your thoughts on my position.
I had individual protection 2014, I have crystallised £1.5 million and taken only the PCLS. I still have a large amount in a non-crystallised SIPP. I am hoping that I will be able to take advantage of being able to crystallise the further £300k even though I have used 100% of an old allowance.
What are your thoughts?

Thanks in advance

All the best

Hi Claret,

If there is a change to the Pension rules, the Regulator and HMRC will issue new guidelines which will deal with these sorts of questions. We will then be in a position to provide everyone with the correct information. It would be premature to speculate at this moment .

[Claret m]

AdamIM said:

Hi Claret,

If there is a change to the Pension rules, the Regulator and HMRC will issue new guidelines which will deal with these sorts of questions. We will then be in a position to provide everyone with the correct information. It would be premature to speculate at this moment .

Thanks Adam

I did not crystallise the whole amount hoping that one day the LTA would be raised, fingers crossed!

[Tony Angelino]

alfaspud said:

Do IM allow a direct transfer from an IM ISA to an IM SIPP?
If that’s possible, what’s the process for setting up the transfer?

I did this last week, there is an option on the main page when you log in at the bottom: 'Move Funds Between Accounts'

[alscar]

Claret m said:

Thanks Adam

I did not crystallise the whole amount hoping that one day the LTA would be raised, fingers crossed!

I also fixed at the 2014 limit but to date have only crystallized very little.I too will cross fingers but I can't see how there could be 2 different LTA's limit eligibility so at some point we might indeed save at least £75k.

[Jockman]

nebpor said:

Hopefully they back date the 60K increase to the previous three tax years as well, but I doubt it !

They don’t usually mess with previous year allowances. I’m assuming you have your eye on carry forward.

[nebpor]

Jockman said:

They don’t usually mess with previous year allowances. I’m assuming you have your eye on carry forward.

Yes, I've just topped my SIPP up to the max using carry forward - I should have done it three years ago, as I missed out on those years, but hey ho!

[Sheepshanks]

The one thing that would help me this year (current tax year) is extending tapering but it seems that's not expected to change.

[Jockman]

Sheepshanks said:

The one thing that would help me this year (current tax year) is extending tapering but it seems that's not expected to change.

Won’t increasing the AIA automatically extend the tapering beyond the 240k / 312k bracket or am I misreading this?

[alfaspud]

Tony Angelino said:

alfaspud said:

Do IM allow a direct transfer from an IM ISA to an IM SIPP?
If that’s possible, what’s the process for setting up the transfer?

I did this last week, there is an option on the main page when you log in at the bottom: 'Move Funds Between Accounts'

Thanks - I see it now I've scrolled to the bottom. How long did it wake for the transfer to complete?

[Tony Angelino]

alfaspud said:

Tony Angelino said:

alfaspud said:

Do IM allow a direct transfer from an IM ISA to an IM SIPP?
If that’s possible, what’s the process for setting up the transfer?

I did this last week, there is an option on the main page when you log in at the bottom: 'Move Funds Between Accounts'

Thanks - I see it now I've scrolled to the bottom. How long did it wake for the transfer to complete?

Was about 2 weeks for me.

[superlightr]

Jockman said:

nebpor said:

Hopefully they back date the 60K increase to the previous three tax years as well, but I doubt it !

They don’t usually mess with previous year allowances. I’m assuming you have your eye on carry forward.

another one hoping they do increase it to 60k and for bonus allow a backdate for the 3 years !!

[AdamIM]

LTA abolished-not just raised

[gt4rs.wp]

How will the 25% tax free be calculated?

[AdamIM]

gt4rs.wp said:

How will the 25% tax free be calculated?

It is now applied to the pension value and not subject to 25% of the LTA

[superlightr]

AdamIM said:

gt4rs.wp said:

How will the 25% tax free be calculated?

It is now applied to the pension value and not subject to 25% of the LTA

sadly not a problem I will ever encounter.

[alscar]

AdamIM said:

It is now applied to the pension value and not subject to 25% of the LTA

Having this discussion on the retirement thread and it’s been suggested that the 25% TFC for those without protection remains unchanged at £268k so what about those with protection or is in fact simply removed and exactly as you said above Adam ?

[alscar]

The government said individuals will continue to be able to carry forward unused annual allowances from the three previous tax years - adding the adjusted income threshold for the tapered annual allowance will also be increased from £240,000 to £260,000 from 6 April 2023.

It said the maximum pension commencement lump sum for those without protections will be retained at its current level of £268,275 and will be frozen thereafter.

But it added the amount which can be taken tax free will be restricted to 25% of the current LTA of £1,073,100 or £268,275.