Question regarding end result of a SIPP

PaulCooper

I have a SIPP, at present my 25% has been taken and it’s in drawdown, some years, this for this year example, I’ll take £0

I realise if & when I get to 75 I have to buy an annuity (OK some ways around it) and on my demise assuming no spouse, then the insurance Co gets the remainder of the fund (I know it's not quite like that, sometimes they win, some they lose)

Can someone please clarify the following

1) The SIPP is still in drawdown (pre me being 75), spouse is still around and I meet my end

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are the funds used to provide a pension to my spouse?

2) The SIPP is still in drawdown (pre me being 75), spouse is not around and I meet my end

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do the funds go to my estate? Are they taxed?

3) The SIPP is required, due to me becoming 75 to purchase an annuity, what happens to an asset within the SIPP, in this case a commercial property, does it simply get sold and hence turned to cash to purchase an annuity?

Thanks

Paul

kidmugsy

PaulCooper wrote: »

I have a SIPP ... in drawdown


1) The SIPP is still in drawdown (pre me being 75), spouse is still around and I meet my end

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are the funds used to provide a pension to my spouse?

Yes: as I understand it she can either continue taking drawdown or buy an annuity.

Linton

PaulCooper wrote: »

2) The SIPP is still in drawdown (pre me being 75), spouse is not around and I meet my end

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do the funds go to my estate? Are they taxed?[/SIZE][/FONT]

The money can go as a pension to a spouse or dependent tax free or to a named beneficiary as a cash lump sum after a 55% tax charge. It isnt part of your estate.

jamesd

You do not have to buy an annuity at 75. The last Labour government eliminated that requirement and the current one changed the terms so they are the same as before 75, except for the once a year GAD calculations.

If you wanted to buy an annuity you'd have to sell the property to release the cash needed for the purchase.

The pension funds never go to your estate. Whether you're over or under 75 the pension pot can be transferred tax free according to your expression of wishes form to a pension pot for our spouse. Or the spouse could choose to take it outside a pension after a 55% tax charge. Others would have to take the 55% tax charge. You use the expression of wishes form provided by your pension company, sending it to them.

Once the money is in the pension pot for the spouse they can choose what to do with it, either continue taking income or use the pot to buy an annuity, or some of each.

PaulCooper

Great
Thanks for the comprehensive replies

Paul