Free money from the tax man - Is it possible ?

deemy2004

EdInvestor wrote:

Wouldn't it be better to put it in an ISA, so you keep it tax free, can access the capital whenever you want, take whatver income you want when you want, and pay no tax on it - or any investment gains you make on it?

This is what most people do.

Oh don't worry the ISa allowances are the first to be filled.... Even today my ISA/TESSA's (including the missus's) is near double the pension pot !

I won't want capital from my SIPP - the income will do just fine as the ISA interest will still be tax free (hopefully)... so my taxable income during retirement will be well within the basic rate band, as most of the income will be non taxable ... offcourse the goverment may force me to amend my strategy should they tinker with the status of existing ISA's

ManAtHome

Oldish new Deems http://business.timesonline.co.uk/article/0,,9559-1784886,00.html - will be interesting to see if loopholes are closed in the next 6 months. Obviously the reinvestment bit only works until you've hit what you'd pay in tax or £215k (I think).

Of course if (or when) you reach 'old git' status, you could put all your salary into a pension and live off the 25% tax-free bit (and/or your state-provided 'office allowance' and 125k 'other expenses', or 'earnings' from charity tours etc... cynical, moi??).

deemy2004

ManAtHome wrote:

Oldish new Deems http://business.timesonline.co.uk/article/0,,9559-1784886,00.html - will be interesting to see if loopholes are closed in the next 6 months. Obviously the reinvestment bit only works until you've hit what you'd pay in tax or £215k (I think).

Of course if (or when) you reach 'old git' status, you could put all your salary into a pension and live off the 25% tax-free bit (and/or your state-provided 'office allowance' and 125k 'other expenses', or 'earnings' from charity tours etc... cynical, moi??).

News ?, it was just a thought, since i can't do it anyway until I reach 50 or 55.

yes I agree with you there .... very cynical... ... Offcourse you could do what most seem to do which is to binge spend your earnings... and then wake up at 60 with cap in hand .... please state can I have some more

ManAtHome

Think you may have missed my oblique reference to that popular beat combo Bliar and the Troughsnouters...

deemy2004

ManAtHome wrote:

Think you may have missed my oblique reference to that popular beat combo Bliar and the Troughsnouters...

LOL.... your right, I did not read the article...

But those with Sipps can do it now ... I guess A DAy is for non sipps ?

ManAtHome

I'll wait for a combined Ed/Dunston/Pal statement next March - likely to make more sense than the politico's or the papers..

dunstonh

Im waiting until January at the earliest as that is when the next batch of guidelines are coming out. Even then, you cant rely on them 100% until April. And then... there is a mop up finance act 12 to take effect April 2007 to close any loopholes which have yet to be found.

Some may recall with ISAs that the guidelines for those were known fairly early. Providers got their stuff together, training took place and then 2 months or before launch, the rules changed a bit on them and everyone had to start again. It cost the industry a lot of money and not many are willing to take that chance again.

At the moment providers are informing us that they are committed to SIPPs and that they are developing products. We are getting snippets of information but each comes with a warning that it is subject to change and not cast in stone.

I wouldnt be transferring my pensions to a SIPP now. It would be waiting to see what is launched and what rules are in place at the end. Some of the things that are being mentioned as being only available through a full SIPP look like that will not be the case and those with personal pensions or stakeholders would still have the ability to do those things, albeit dependent on the provider (and what happens between now and April ).

Pal

Personally I would suggest waiting until at least the middle of next year before leaping into any SIPP, as the market is likely to change a lot, and the first products launched are unlikely to be the best ones for very long.

Everyone talks about A-day like it is a deadline, which it isn't. There really isn't any reason to rush into anything.

EdInvestor

For someone like Deemy who's an experienced trader and might want to deal a lot , one of the cheap broker SIPPs would probably be best - Squaregain + Sippdeal is the usual pick by such people.Small annual fee for the SIPP, but lower dealing cost and good service. If you want to put the SIPP into something LTBH, Sippdeal plain vanilla would do the trick - no AMC, but higher dealing fee. Most of the cheap brokers have SIPPs - just look around to compare costs - actually it might be a suggestion for Martin's "to do list" later

There may be something better in the pipeline if you have a lot of protected rights money hanging around, which is not allowed in ordinary SIPPs at the moment.

deemy2004

ManAtHome wrote:

Think you may have missed my oblique reference to that popular beat combo Bliar and the Troughsnouters...

The true troughsnouters seem to be those working in the public sector.. who have recently been guranteed pensions that future tax payers will have to fund... whilst the private sector has to make do with market forces that no doubt will likely discount the £900 billion public sector pensions black hole through marking down pension fund valuations through poor performing assets due to excessive non productive taxation.