Income Drawdown - GAD Limits

davidm_uk

I have an income drawdown type pension, from which I took a single amount of the max allowed by GAD in March 2012, and am soon planning to do the same for March 2013.

Can anyone tell me what the period for GAD is - financial year, calendar year or rolling 12 months from first withdrawal. i.e. if I take the full amount this month is that it for the next 12 months or could I make another withdrawal after April 5th this year?

silvasava

I think its financial year as I also took a single amount last July. I'm not a taxpayer & the HMRC taxed me so the Investment Company have been sending me the repayment of tax monthly - grrr - so that's what I'm basing my assumption on.
Your company/IFA should be able to advise you - you've reminded me to get mine sorted too for this year

GhIFA

Potentially none of those options! - It will be based on 12 month period from when the crystallisation took place (This may not necessarily be the date you took the first payment).

For example (and in order to keep things simple, assuming you have only one "tranche" within the plan because you crystallised all of the benefits at the same time), you say you took the last payment in March 2012, however, if you had taken the tax free cash say in September 2011, and then waited to draw the income, the year will be based on 12 months from the date you took the tax free cash and therefore September to September.

Also note, that the maximum amount that can be drawn from a Capped Drawdown plan reverts to 120% of the GAD rate with effect from 26th March - Depending on when your plan started, and when the maximum income was last set/reviewed, and when the actual plan anniversary occurs, you may potentially be able to draw a higher income this year.

jamesd

As GhIFA wrote, no fixed rule, you'll have to ask the pension provider. Also ask them how the change to 120% GAD will affect you because you might want to wait for that.

You can withdraw another year's worth as soon as you enter the plan's new year, whenever that happens to be.

mania112

It is fixed to the day when the funds were crystallised. If you transferred to a new provider, it will be the day the policy started (more or less).

As said, at your next anniversary day you could ask for an income review to see if you can benefit from improved income rates (if that's important to you) - so long as your anniversary date is after 26th March.