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AMENDMENT TO DATE - Drawdown Pensions - Increase to 120% p.a.
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clarkkent
Posted: 27 January 2013 18:15:22(UTC)
#12

Joined: 09/12/2010(UTC)
Posts: 11
Forget it.
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colin cross
Posted: 29 January 2013 11:07:58(UTC)
#13

Joined: 25/04/2012(UTC)
Posts: 7
The total portfolio in question is 45pc funds and ITs, ave 5pc min yield,plus 55pc shares across 60 or so companies, all at 4-8 pc, apart from a few recovery punts and hospital cases( TCook !!!).
Yes, what I really want is to run down our SIPPS and build up the ISAs over the next 10 years, maybe then putting
The rump of the SIPPS into annuities to avoid the 55pc for the taxman, but I need to run it down so hence my quest.

Regards to all

Colin and A nine
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Bestmate
Posted: 29 January 2013 17:23:39(UTC)
#4

Joined: 13/02/2012(UTC)
Posts: 38

Thanks: 20 times
Was thanked: 41 time(s) in 18 post(s)
"I disagree that you should always take the max drawdown from your SIPP when paying basic rate or no tax. It may be the case if you are single but if you have a partner then just put the proportion into drawdown that you need.Leave it invested in your SIPP if you do not need it. Why, because when one partner dies the spouse will receive any SiPP or part of it that has not gone into drawdown as a tax free payment with no 55% tax charge. Also your money left in a SIPP is in a tax efficient wrapper and to withdraw money with 20% tax to reinvest back into similar investments or 2-3% cash does not seem sensible. If you have a partner only withdraw what you need."[/quote]

Fair enough if this is the main source of income for your spouse after your death, however, you may also want to consider heirs other than your spouse. If you get out as much as you can (at the 20% tax rate only) then the IH Tax will be levied on this eventually at 40% over and above the concessionary limit if this applies to your estate. If it is left in DD then the 55% levy will apply, irrelevant of the size of your estate. Naturally this can change, but this is the situation now, as I understand it.
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Stephen Garsed on 13/02/2013(UTC)
PhilB
Posted: 11 February 2013 15:27:56(UTC)
#14

Joined: 24/06/2010(UTC)
Posts: 25

Was thanked: 15 time(s) in 9 post(s)
I might be a bit too late to comment usefully, but I was caught badly by the 100% rule and think there IS a way to "force" a recalculation of your underlying capped drawdown (you are in capped drawdown and cannot go to flexible?).

Either put some new money (up to £2880, gov't raises this to £3600 - the max. if you are not working and earning) and then "crystallise" it for drawdown. I believe this will ensure your entire enlarged SIPP fund must be recalculated. Put the new money in now and crystallise it after 26 March and hopefully all will work out.

Or pay H-L for a recalc as soon as they are permitted to do it after 26 March - maybe you have been down that route already, being the reason for your "51 weeks" comment.

I stress I am no expert on this, so maybe completely wrong, but worth enquiring all the same! Good luck with this.
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colin cross on 11/02/2013(UTC)
colin cross
Posted: 11 February 2013 15:58:40(UTC)
#15

Joined: 25/04/2012(UTC)
Posts: 7
Phil

Are you suggesting I put up the 2880 into a new SIPP entirely and then this may trigger an overhaul
of my entire pot if I apply to make this a drawdown after 26/3 ?
My current SIPP review date is 19 March, hence my moan at having to wait 51 weeks !

I do know it is not possible to add to the existing drawdown but you idea is a bit different, who knows ??

Regards

Colin
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PhilB
Posted: 11 February 2013 16:52:58(UTC)
#16

Joined: 24/06/2010(UTC)
Posts: 25

Was thanked: 15 time(s) in 9 post(s)
Hi Colin,

No - a new SIPP would defeat the whole thing.

Let me tell you where my researches got me:
1) with a SIPP in capped (not flexible) drawdown you can add new money, but if you have no earnings - from work, as opposed to investments/pensions - this amount is restricted to £3600 gross
2) that is a maximum, the minimum will be governed by H-L's rules
3) new cash in a SIPP must be "designated" for drawdown

I am not certain, but I believe it may be the case, that when you "designate" the additional, new money for drawdown, the rules state that the entire SIPP fund must be recalculated at that date, which becomes the new "pension anniversary date". Do the "designation" bit after 26 March to get the 120% plus the extra year or so of age, plus a bigger SIPP "pot" (hopefully). By the way this does incur a charge from H-L.

It would be well worthwhile talking to H-L to ask the question of whether I have got it right or not. If I have, you achieve your goal.

Some wording about this can be found on HMRC's technical pages - but beware, the going is very difficult for the layperson. A phone call to H-L would be easier.
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martigapito broker
Posted: 12 February 2013 00:18:49(UTC)
#17

Joined: 11/02/2013(UTC)
Posts: 2
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colin cross
Posted: 12 February 2013 16:10:19(UTC)
#18

Joined: 25/04/2012(UTC)
Posts: 7
This must be a misposting as it is totally off the wall !!

Colin
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colin cross
Posted: 13 February 2013 13:43:32(UTC)
#19

Joined: 25/04/2012(UTC)
Posts: 7
PhiilB

I am away at present but will follow up with h-l on my return and keep you posted, thanks again

Colin
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