SIPP strategy with larger pots?
Discussion
Hi All,
Wondering if anyone with a larger SIPP pot has changed/is changing their strategy toward this in light of IHT changes?
I am late 30's with a SIPP in the £500k+ bracket, I'm in the fortunate position of being able to load it up with cash direct from my own ltd company.
I realised some time ago it will go over the LTA (before that was abolished) but still saw it as a good way to transfer wealth later down the line given there was no IHT.
The change in IHT rules make me think I'm potentially just kicking a massive tax can down the road, and wondering if I should stop paying in.
The alternatives would be either simply take more dividends (and pay more tax now rather than later) or perhaps revisit a Family Investment Company which I had toyed with before.
There's a flip side to say by the time IHT is relevant to me the rules might have changed another 10 times so don't do anything.
I'd welcome any inputs from those with knowledge of the current landscape on what actions taken if any.
Wondering if anyone with a larger SIPP pot has changed/is changing their strategy toward this in light of IHT changes?
I am late 30's with a SIPP in the £500k+ bracket, I'm in the fortunate position of being able to load it up with cash direct from my own ltd company.
I realised some time ago it will go over the LTA (before that was abolished) but still saw it as a good way to transfer wealth later down the line given there was no IHT.
The change in IHT rules make me think I'm potentially just kicking a massive tax can down the road, and wondering if I should stop paying in.
The alternatives would be either simply take more dividends (and pay more tax now rather than later) or perhaps revisit a Family Investment Company which I had toyed with before.
There's a flip side to say by the time IHT is relevant to me the rules might have changed another 10 times so don't do anything.
I'd welcome any inputs from those with knowledge of the current landscape on what actions taken if any.
Personally I think loading the pension is a no brainer. Keep sticking the £60k per annum in and that reduces your corp tax bill and you’re building up a big fund so you can have a comfortable retirement. If you don’t really need the additional income then you’re just drawing more money out the company than you need and paying tax on it and for what?
Jurgen100 said:
Personally I think loading the pension is a no brainer. Keep sticking the £60k per annum in and that reduces your corp tax bill and you’re building up a big fund so you can have a comfortable retirement. If you don’t really need the additional income then you’re just drawing more money out the company than you need and paying tax on it and for what?
^This!firstly, congrats with a decent sized fund so early on!
pre-budget I was firmly in the grow pension mode for obvious reasons.
post-budget I've decided to stop funding it. Better to leave and employ in the business and wait and see if anything changes before it's officially enacted - you can always back date a contribution for a couple of years times if need be
pre-budget I was firmly in the grow pension mode for obvious reasons.
post-budget I've decided to stop funding it. Better to leave and employ in the business and wait and see if anything changes before it's officially enacted - you can always back date a contribution for a couple of years times if need be
simon800 said:
Hi All,
Wondering if anyone with a larger SIPP pot has changed/is changing their strategy toward this in light of IHT changes?
I am late 30's with a SIPP in the £500k+ bracket, I'm in the fortunate position of being able to load it up with cash direct from my own ltd company.
I realised some time ago it will go over the LTA (before that was abolished) but still saw it as a good way to transfer wealth later down the line given there was no IHT.
The change in IHT rules make me think I'm potentially just kicking a massive tax can down the road, and wondering if I should stop paying in.
The alternatives would be either simply take more dividends (and pay more tax now rather than later) or perhaps revisit a Family Investment Company which I had toyed with before.
There's a flip side to say by the time IHT is relevant to me the rules might have changed another 10 times so don't do anything.
I'd welcome any inputs from those with knowledge of the current landscape on what actions taken if any.
My view is the incumbent interloper won’t be making the rules when I croak. Crack on I sayWondering if anyone with a larger SIPP pot has changed/is changing their strategy toward this in light of IHT changes?
I am late 30's with a SIPP in the £500k+ bracket, I'm in the fortunate position of being able to load it up with cash direct from my own ltd company.
I realised some time ago it will go over the LTA (before that was abolished) but still saw it as a good way to transfer wealth later down the line given there was no IHT.
The change in IHT rules make me think I'm potentially just kicking a massive tax can down the road, and wondering if I should stop paying in.
The alternatives would be either simply take more dividends (and pay more tax now rather than later) or perhaps revisit a Family Investment Company which I had toyed with before.
There's a flip side to say by the time IHT is relevant to me the rules might have changed another 10 times so don't do anything.
I'd welcome any inputs from those with knowledge of the current landscape on what actions taken if any.
I wouldn`t worry could change lots like you say. I`m still doing the same to mine loading it to the max while we can and got to your figures too I`m 48, plus a nice lump in SS ISA`s
The only other thing I did think of, was making my wife director now and loading hers as she doesn`t have one. That way I can use her personal allowance when we drag from it. Wouldn`t want her PA to go to waste
The only other thing I did think of, was making my wife director now and loading hers as she doesn`t have one. That way I can use her personal allowance when we drag from it. Wouldn`t want her PA to go to waste
You could take money out and invest in SEIS et al and likely in 5 years will get a reasonable return at low tax if you want to minimise tax.
You can then gift that if you want to avoid IHT.
Gut says with 500k at late 30s it’ll be over LTA whatever you do if it just tracks markets for 20+ years, so it’s not silly to think about how to get money you can use sooner to me.
Definitely worth speaking to an advisor or two, it’s a tricky thing you’re trying to solve for!
You can then gift that if you want to avoid IHT.
Gut says with 500k at late 30s it’ll be over LTA whatever you do if it just tracks markets for 20+ years, so it’s not silly to think about how to get money you can use sooner to me.
Definitely worth speaking to an advisor or two, it’s a tricky thing you’re trying to solve for!
Thanks guys, really interesting mix of views.
The corporation tax saving is a big consideration in the overall equation.
As it happens I am meeting a tax advisor this week for a view on it, will update the thread if anything ground breaking comes out of it. I was keen to gauge any real life experience people have had ahead of seeing him, so will run some of the thoughts above by him!
The corporation tax saving is a big consideration in the overall equation.
As it happens I am meeting a tax advisor this week for a view on it, will update the thread if anything ground breaking comes out of it. I was keen to gauge any real life experience people have had ahead of seeing him, so will run some of the thoughts above by him!
forest172 said:
The only other thing I did think of, was making my wife director now and loading hers as she doesn`t have one.
This is a good shout, thank you. My wife's pension is far more modest. She’s a shareholder but not a Director, I kicked this idea around and for whatever reason didn’t get to the point of making her a Director. Will reexplore this too, thanks!simon800 said:
This is a good shout, thank you. My wife's pension is far more modest. She’s a shareholder but not a Director, I kicked this idea around and for whatever reason didn’t get to the point of making her a Director. Will reexplore this too, thanks!
If you have enough spare cash to be able to over your annual allowance this is definitely worth doing.simon800 said:
This is a good shout, thank you. My wife's pension is far more modest. She’s a shareholder but not a Director, I kicked this idea around and for whatever reason didn’t get to the point of making her a Director. Will reexplore this too, thanks!
it is. Same here she`s a shareholder but not director too.Gassing Station | Finance | Top of Page | What's New | My Stuff