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Pension contribution dilemma
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SSJ
Posted: 16 March 2023 13:22:46(UTC)
#11

Joined: 13/09/2010(UTC)
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kim shillinglaw;260986 wrote:
I know I must be being dim but what does this mean?


If you retire early and have no other income for a number of years then of course you could be taking 1.33*£12,500 = £16,166 of completely tax free income from a SIPP.

You're not alone :)

Things I do know are:

- 1.33*£12,500 = £16,625

- the standard annual personal allowance for income tax is £12,570

- a SIPP withdrawal can be taken together with its 25% tax-free sum.

- if you want the potentially taxable 75% part of a SIPP withdrawal to max-out the annual personal allowance then divide the personal allowance by 75% (0.75) to calculate the total amount to withdraw from the SIPP. In other words, multiply it by 4/3 or 1.3333. This gives a limit of £16,760 of tax-free withdrawal. Other income will muddy the waters, depending on its type.
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2 users thanked SSJ for this post.
Tim D on 16/03/2023(UTC), kim shillinglaw on 20/03/2023(UTC)
philip gosling
Posted: 18 March 2023 12:33:04(UTC)
#12

Joined: 06/01/2013(UTC)
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If you live in SE then your houses will be your largest asset and may continue to grow faster than your salary - assets in your SIPP put into trust (just fill in a form with the SIPP Platform free nominating your beneficiaries) the amount is exempt Inheritance tax if you die before age 75. Even if you die after 75 your SIPP then is taxed as income with the beneficiary's normal income . If you have grand children then they could draw each year their personal tax allowance taxfree - a good bonus for the family.
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1 user thanked philip gosling for this post.
kim shillinglaw on 20/03/2023(UTC)
Thrugelmir
Posted: 18 March 2023 16:27:45(UTC)
#13

Joined: 01/06/2012(UTC)
Posts: 5,333
philip gosling;261311 wrote:




If you live in SE then your houses will be your largest asset and may continue to grow faster than your salary


Or possibly not. Interest rates are ultimately one of the main drivers of the direction of travel. Might take time to filter through. But ultimately will impact the bottom of the pyramid, i.e. first time buyers. Who underpin the entire market above.
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