Crystalised versus Uncrystalised Splits in SIPP Platforms

fcandmp

I am trying to get my head around the accounting approach taken to handling crystalised versus uncrystalised funds in my Interactive Investor SIPP - Can anyone shed any light on the way they handle growth in the cystalised versus uncrystalised components, and account for any changes when a buy or sell transaction is made?

Are any other of the mainstream SIPP platforms any more transparent in their handling of this, such that you can actually see both elements, without having to ask for the administrators to provide you a current position?

Do others just live with this conundrum or do they hold two SIPP accounts to achieve clarity, with crystalised funds in one, and uncrystalised in another.

Many thanks

jamesd

Just about all places use two different accounts.

AnotherJoe

What happens if your investments don't split neatly though, and even if they did which would they put in each category ?

fcandmp

Another Joe, the main split I am trying to account for is purely cash versus funds. Attempting to hold crystallised funds in cash and uncrystalised in funds.

They appear to operate the other way around leaving the cash uncrystalised, with all the growth occurring in the crystallised portion.

AnotherJoe

fcandmp wrote: »

Another Joe, the main split I am trying to account for is purely cash versus funds. Attempting to hold crystallised funds in cash and uncrystalised in funds.

They appear to operate the other way around leaving the cash uncrystalised, with all the growth occurring in the crystallised portion.

Right, but my question is, what determines which funds and cash end up where? What if there isn't enough cash alone to fill up the uncrstallised (if thats what they start by doing, moving cash into the UC). WhHich funds would they move?? I think I'll give my SIPP provider a call.

EdSwippet

AnotherJoe wrote: »

Which funds would they move?? I think I'll give my SIPP provider a call.

It's odd how opaque the mechanics of this are, isn't it? I have three SIPPs, and while each of the providers says in vague-ish terms that I can take the 25% PCLS and move the rest into drawdown, none of them says exactly how they will manage that.

In my case, once I bump into the LTA but don't need drawdown right away, ideally I want them to move 25% of each of my current holdings 'in specie' into a trading account forming my PCLS, and place the remaining 75% in a deferred drawdown account. That way I'm not out of the market for any period, and also minimise trading charges.

My guess is that none of my SIPP providers will do this, and I'll be shuffling things around a bit over a period of a few weeks or so in order to accomplish that. I'd be happy if any of them surprised to the upside, though!

fcandmp

edswippet, I have found a closed thread from 2014 on this forum, which appears to shed assumed light on this, but at that time II were not willing to illuminate further - claiming proprietary ingredients.

I am awaiting an enquiry as to the steps needed to position my cash and stock into the balance of crystallised and uncrystalised and will report back.

coyrls

EdSwippet wrote: »

It's odd how opaque the mechanics of this are, isn't it? I have three SIPPs, and while each of the providers says in vague-ish terms that I can take the 25% PCLS and move the rest into drawdown, none of them says exactly how they will manage that.

In my case, once I bump into the LTA but don't need drawdown right away, ideally I want them to move 25% of each of my current holdings 'in specie' into a trading account forming my PCLS, and place the remaining 75% in a deferred drawdown account. That way I'm not out of the market for any period, and also minimise trading charges.

My guess is that none of my SIPP providers will do this, and I'll be shuffling things around a bit over a period of a few weeks or so in order to accomplish that. I'd be happy if any of them surprised to the upside, though!

Yes, I'm pretty sure you will have to sell investments to get 25% as cash, which will be transferred to your bank account, which you can then use to reinvest. I had a transfer from an occupational DC scheme arrive as cash (no alternative) and then left enough to cover 25% of my holdings as cash for my PCLS, which I took shortly after the transfer, so I didn't investigate alternatives.

kidmugsy

fcandmp wrote: »

Do others just live with this conundrum or do they hold two SIPP accounts to achieve clarity, with crystalised funds in one, and uncrystalised in another.

That's how my SIPP is at Hargreaves Lansdown: one account is called "SIPP" and the other "drawdown SIPP" if I remember correctly. Each is invested in different things at the moment because that's what suits me.

They'll stay like that until a need makes me empty the "drawdown SIPP" account, or more likely makes me take some more TFLS.

AnotherJoe

Kidmugsy how did the particular funds in those two accounts get there assuming you started with the one account ? What determined which fund and cash went into which ?

Chordeiles

Just about all places use two different accounts.

All the places I called this week DON'T use two different accounts (AJ Bell, Charles Stanley Direct, TD Direct).
As I see it using a single account means that the amount that you crystallised is a cash amount (i.e. just a number that they need to remember) and not a percentage of your whole fund. That way, if (as hoped) your funds have grown by the time you do the next "crystallisation" then there will be more uncrystallised value from which to grab future tax-free lump sums. If this seems too good to be true I'd love to hear from someone who understands the legislation. And of course if growth is negative then you'll be on the losing side for tax as well as investments.

And to answer another question, where there are two accounts, what goes into each must be your decision, surely, seeing as the "SI" in SIPP stands for "self invested".