Personal investment withdrawals

scotpath

Looking to take a considerable amount out of a plan they have given me 4 options not sure what one to take this is from Halifax Bank of Scotland some of the options say cash in whole segments of plan others tell me to take part of the segments,this will be taxable wondering if anyone has any idea or has dealt with similar,I have already had a withdrawal 2 years ago any help or guidance would be appreciated as I don't really understand a lot of it I have already contacted Halifax but it is double Dutch to me.

tacpot12

I suspect you need to confirm what sort of investment plan you are looking to withdrawn from. What are all the four options you have been given?

Are you saying that one option is taxable, and the other isn't?

scotpath

No I think they all are taxable

Malthusian

You need to give us more information. Exactly what kind of plan is it and is it qualifying or non-qualifying? If you don't know you will need to find out. How much was invested, how much has been withdrawn before, and how much do you want to withdraw? What is your total income in this tax year?

You need to be careful as this sounds like an insurance bond and getting it wrong can have severe tax consequences - Google Joost Lobler. (That was an exceptional case but less exceptional cases can still result in unexpected tax bills.) If you are in any doubt take independent advice from an accountant or IFA.

scotpath

I think it's a qualifying plan it's from Halifax Bank of Scotland it's called a Personal Investment Plan they say the plan is invested across 100 identical segments they give me 4 options on the withdrawal paper1 is the standard option Using a combination of options 2 and 3 , option 2 says take a lump sum or regular withdrawals by partly cashing in equal amounts from all the segments,option3. Says cash in whole segments and option 4 says cash in a specific number of whole segments and then partly cash in an equal amount from all remaining segments. I originally invested a total of £78000 this was done in 2 lots but has been in the pot for a number of years well over 10 my income roughly from last year would be £26668 my first withdrawal 2 years ago was £22000 and I am looking to take £63000 out now. I stay in Scotland and think the higher tax bracket is £43000. Thanks again for any information remember a lot of this stuff is a bit over my head so if any info please keep easy to understand,I am thinking it's probably option 1 but not sure.

Malthusian

£63,000? See an accountant or IFA. This is not a job for random strangers down the pub.

If the investment was made in two instalments it's non-qualifying.

dunstonh

I think it's a qualifying plan it's from Halifax Bank of Scotland

To be honest, I thought these were non-qualifying as they were open ended. However, if yours has a maturity date, then it makes it more likely to be qualifying. Halifax did use the PIP moniker on different product versions over time.

Whether it is qualifying or non qualifying will not make much of a difference in most cases. The aim is to keep the surrenders, after top slicing relief, below the higher rate band.

Can you defer some of the withdrawal to the next tax year?
Do you have a spouse or trusted partner?

scotpath

Mines has no maturity date,sorry need all the money this time. Also wondering if I go into the higher tax bracket do you have to pay them direct or can they take it off you at source the difference.

xylophone

http://www.justanswer.co.uk/tax/8wpty-personal-investment-plan-due-mature.html

Is your plan the type discussed above?

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0001

Does the above help?

Malthusian

scotpath wrote: »

Mines has no maturity date,sorry need all the money this time.

If you cash it in in full that simplifies the tax calculation compared to withdrawing nearly all the money. Based on the figures presented there is a possibility you may pay higher rate tax and/or lose your personal allowance, although you haven't given us enough information to be definitive.

Also wondering if I go into the higher tax bracket do you have to pay them direct or can they take it off you at source the difference.

You will have to complete a tax return and pay the higher rate liability.

scotpath

Think it is the second one xylophone