Tax and SIPP

Alan5

Hi folks,
I have a small (30k) SIPP taken out to allow me to draw down a pension. At the moment, the money is held in cash. I chose cash for I had planned to only keep it in there for a year. If instead, Indecided to invest the money within the SIPP, what tax would I have to pay. I am a lower rate tax payer.

Linton

Alan5 wrote: »

Hi folks,
I have a small (30k) SIPP taken out to allow me to draw down a pension. At the moment, the money is held in cash. I chose cash for I had planned to only keep it in there for a year. If instead, Indecided to invest the money within the SIPP, what tax would I have to pay. I am a lower rate tax payer.

There are no taxes to pay on money within a SIPP. When you take money out it is taxed as income.

Alan5

Hi Linton and thank you for that. I plan to retire this summer and take all of the SIPP in one draw down in the following tax year. I have taken the 25% so I expect to be taxed at an emergency rate and then, hopefully claim at my normal rate from HMRC ie 20% after £11500
Alan

philtapsell

From Phil in manchester

Only income now is from SIPP, until armed forces pension kicks in in 3 years.

I get 25% of what I draw out tax free, but if I keep any additional withdrawals, over and above that 25%, below my personal tax free allowance, does that mean I won't have to pay any tax on withdrawals from the SIPP?

Thanks

Phil

gadgetmind

Can't you spread this over three years and avoid tax altogether?

bigadaj

philtapsell wrote: »

From Phil in manchester

Only income now is from SIPP, until armed forces pension kicks in in 3 years.

I get 25% of what I draw out tax free, but if I keep any additional withdrawals, over and above that 25%, below my personal tax free allowance, does that mean I won't have to pay any tax on withdrawals from the SIPP?

Thanks

Phil

Yes that's right.