SIPP, Hargreaves Lansdown and Funds

moredrama

Hi there,

If I took out a SIPP with HL, would that mean I'd only be able to buy/sell whatever they offer, i.e. shares and funds? Would I be able to buy an option or corporate bond from a different broker, say, and have it transferred to my SIPP with HL?

Cheers...

EdInvestor

moredrama wrote: »

Hi there,

If I took out a SIPP with HL, would that mean I'd only be able to buy/sell whatever they offer, i.e. shares and funds? Would I be able to buy an option or corporate bond from a different broker, say, and have it transferred to my SIPP with HL?

Cheers...

Ring up and ask.You might be better with a more sophisticated SIPP provider such as Sippdeal or Selftrade, which are more used to dealing with this kind of deal and will usually be flexible.

purch

E Trade offer a SIPP, which is a decent option if you don't want to invest much in Managed Funds.

Dealing costs are low, and E Trade are an excellent broker in terms of price quality.

sabelu

Can someone check my understanding?

I have 45k invested in an HL SIPP and 25k in a Vantage Share Account.

Can I assume that if I sell 15k worth of shares and transfer the money into the SIPP the HM Revenue will make this up to 25k as I pay 40% tax on part of my income or do I sell 25k shares and they rebate me 10k, how does this work?

Is it also right at 50 I can withdraw 20% off my SIPP fund tax free? Does 'at 50' mean in the tax year (April onwards) of your birthday or after the date of your birthday?

jamesd

sabelu, you can ask them to transfer and HMRC will add the 22% rebate, which will show up in your SIPP account about three months later, once HMRC has paid the money to HL. You can opt to have that paid in as cash or use it to buy the same investments in the same percentages as you used originally.

As a higher rate tax payer should write to your tax office telling them the value of the funds when they arrive in the SIPP. Be sure to say whether the value you give is net or gross with basic rate tax rebate included. HMRC will send you a cheque for the tax rebate you're entitled to. Unless you owe tax for other things, in which case they would deduct that first.

I suggest that you call HL and ask them any questions you have, like whether they have to sell inside the ISA then buy back inside the SIPP after moving the cash into it. They will probably be able to initiate it all for you during that call.

The age is changing from 50 to 55 by 2010. I don't know the answer to the birthday part of your question.

EdInvestor

sabelu wrote: »

Is it also right at 50 I can withdraw 20% off my SIPP fund tax free? Does 'at 50' mean in the tax year (April onwards) of your birthday or after the date of your birthday?

At 50 (55 from 2010) means after the date of your birthday.You can withdraw 25% of the fund in tax free cash. The rest of the SIPP will then go into "income drawdown"but you can take nil income if you choose.

sabelu

EdInvestor wrote: »

At 50 (55 from 2010) means after the date of your birthday.You can withdraw 25% of the fund in tax free cash. The rest of the SIPP will then go into "income drawdown"but you can take nil income if you choose.

So Ed you can manage as a normal SIPP with investments rather than take an income? With all the benefits?

EdInvestor

sabelu wrote: »

So Ed you can manage as a normal SIPP with investments rather than take an income?

Yes

With all the benefits?

Not sure quite what you mean?

sabelu

Ed does this mean the SIPP stays in tact? following the 25% withdrawal.

EdInvestor

sabelu wrote: »

Ed does this mean the SIPP stays in tact? following the 25% withdrawal.

Yes, you just go on investing the remaining 75% in the normal way.