drawdown tax

AnotherJoe

zagfles wrote: »

Why do you think that? I'd imagine most people will have some taxable interest, and interest within the new savings allowance will have to be declared as it can affect tax.

Most people don't have more than a few hundred quid in savings, so no, most people won't have some taxable interest. Anyone on basic rate tax would likely need about £50k in savings, a sum that few could aspire to

dunstonh

zagfles wrote: »

Why do you think that? I'd imagine most people will have some taxable interest, and interest within the new savings allowance will have to be declared as it can affect tax.

Why do you think that most people in the UK have more than £50k-£100k in cash savings?

zagfles

AnotherJoe wrote: »

Most people don't have more than a few hundred quid in savings, so no, most people won't have some taxable interest. Anyone on basic rate tax would likely need about £50k in savings, a sum that few could aspire to

What part of "interest within the new savings allowance will have to be declared" didn't you understand? Or did you disagree?

Even if you just have a few pounds of interest, which will be taxed at 0% because it's in the PSA, if you fill in any tax form like the P53 it'll generally have to be declared. Just like (eg) income that falls within the personal allowance.

Income like (non-ISA) interest is still "taxable" if it falls within an allowance, whether that's the personal savings allowance or the normal personal allowance, even if no tax is due. So it needs declaring.

zagfles

dunstonh wrote: »

Why do you think that most people in the UK have more than £50k-£100k in cash savings?

I don't. More attention to detail needed, again

AnotherJoe

pauljohnwilson wrote: »

They take a handling fee for each draw down. The rate varies, but in this case it was £200

No, they don't. Whatever you are doing That's generating a fee isn't drawdown.
Is that the fee for selling some investments maybe before you take the drawdown.

As said, why not just take out say £700/month for ten months ? There will be no tax and no complications (and no fees) Presumably you are doing that because you are trying to avoid a fee on each withdrawal? But there shouldn't be one.

You really need to dig into that £200 fee, something is wrong or very very non standard.

AnotherJoe

zagfles wrote: »

What part of "interest within the new savings allowance will have to be declared" didn't you understand? Or did you disagree?

Even if you just have a few pounds of interest, which will be taxed at 0% because it's in the PSA, if you fill in any tax form like the P53 it'll generally have to be declared. Just like (eg) income that falls within the personal allowance.

Income like (non-ISA) interest is still "taxable" if it falls within an allowance, whether that's the personal savings allowance or the normal personal allowance, even if no tax is due. So it needs declaring.

So you estimate it as (say) £100. Or £200. It doesn't matter as long as you know it will be well under £1,000 so no need to wait until end of tax year to see what it is.even if it will be over you can give an estimate. That will get corrected the following year.

zagfles

AnotherJoe wrote: »

So you estimate it as (say) £100. Or £200. It doesn't matter as long as you know it will be well under £1,000 so no need to wait until end of tax year to see what it is.even if it will be over you can give an estimate. That will get corrected the following year.

Well, yes. But you don't estimate it as nil as suggested here.

Quote: Originally Posted by dunstonh
For most people the answer will be nil as its only interested in taxable interest.

Worrying that an IFA doesn't seem to know the difference between taxable income and taxed income!

OldBeanz

Next fy I intend drawing down £12k in the one transaction. I am a BR tax payer and will still be within that tax band with this withdrawal. I am trying to work out the first date I can do this and not have my SIPP provider deduct money at the higher rate. I would assume that I could draw the £12k (£9k taxable) some 4 months before the end of the tax year and the correct tax would be deducted (tax code assumption £9kx5 months HR payable, £9kx4 months BR). So is my optimum date (to allow me not to have to claim money back or provide my SIPP provider with a HMRC tax code) the 5th December?

Bootsox

Sorry for the hijack but there seem to be a few HL aficionados on this thread.

Within their SIPP, I understand HL will allow shares in individual companies.

In the case of a SIPP, comprising purely individual company shares, what is the mechanism for HL levying their (0.45% in my case) fee?

e.g. do they do an annual valuation of the shareholding and levy accordingly?

I did message HL direct this question but no response (yet).

k6chris

AnotherJoe wrote: »

As said, why not just take out say £700/month for ten months ? There will be no tax and no complications (and no fees)

Interesting. I thought, based on other posts, that 'best practice' was to physically have about 3 years drawdown in cash, to avoid impact of market crash. Can this simply be achieved by just keeping the appropriate amount of money 'uninvested' in the SIPP and getting a monthly DD payment from the SIPP set up, which will presumable use that cash? Further to that, would better practice be to keep say 5 years DD in cash, and reinvest 2 years worth if there is say a 25% (insert your own predetermined rule) in investments? I had no idea you could get a monthly DD payment with no fees - learning all the time!