SIPP and tax

tigerspill · 28 February 2015 at 4:34PM

Hi,

I am trying to understand the tax aspects of withdrawing from a SIPP

Lets say I have zero income in the first year I start to collect from my SIPP.
I know I can take 25% tax free.
But if I have no other income, can I also take my tax free allowance tax free (approx £10500) as well without having to pay any tax?

zagfles · 28 February 2015 at 4:45PM

Yes, the 75% not "tax free" is taxable as income, so you can use your personal allowance against it so can get another £10,600 tax free if no other income.

tigerspill · 28 February 2015 at 4:46PM

zagfles wrote: »

Yes, the 75% not "tax free" is taxable as income, so you can use your personal allowance against it so can get another £10,600 tax free if no other income.

Thanks. I just wondered if there was any special rules in the year you collect the 25% tax free.

zagfles · 28 February 2015 at 5:05PM

tigerspill wrote: »

Thanks. I just wondered if there was any special rules in the year you collect the 25% tax free.

Nope. Obviously the year you retire you might have some employment income for part of the tax year so that might use up some of your allowance...

SIPP and tax

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