tax relief on interest from a cash SIPP

philip-g

I would appreciate advice please regarding my SIPP which is invested in two 5 year fixed rate bonds. My provider says the interest paid does not qualify for the personal savings allowance as it is paid to me as income but if they are wrong what would be the best way to approach HMRC about it?


philip-g

HappyHarry

The interest paid would be paid to the SIPP and not to you, so would not affect your Personal Savings Allowance.

The SIPP would receive the interest tax free.

If the SIPP then pays you the interest, then you should treat this as income from the SIPP, i.e. 25% of it would be tax free and 75% of it would be taxable income.

This income from the SIPP would not fall under your Personal Savings Allowance.

jamesd

There is no tax paid on the interest when it is paid into your SIPP account. Any income you take out of your SIPP account is PAYE income, not interest, and is taxed as normal non-interest income. PSA doesn't apply to it.

coyrls

philip-g wrote: »

but if they are wrong what would be the best way to approach HMRC about it?

They are not wrong and so you do not need to approach HMRC about it.

philip-g

Thank you all for your prompt responses - at least I know where I stand and that the information I was given originally was correct . philip-g