Taxation on 25% SIPP drawdown

cloud_dog

pensionpawn wrote: »

Thanks for that. I'v also just read that there is a 30% uplift in annual contributions trigger too!

Hi...could you explain further, or point at a website?

pensionpawn

cloud_dog wrote: »

Hi...could you explain further, or point at a website?

Sure, found some info here... https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/recycling-of-tax-free-cash/

Mnd

The recycling is based on a 5 year time scale I believe, 2 years before, 2 years after and the current year, this is to prevent doing it the other way round.
I also understand that the 7500 limit is a 12 month gap required, not just 2 different tax years,
So, if I am correct, what you could do is to take 7500 tax free now..reinvest in your pension(as long as you have relevant earnings and not taken any drawdown or exceeded the annual or lifetime limits,)and repeat in 12 months with the remainder of your money.
No recycling rules broken then
Again this is my understanding and will need to be checked
Hope it helps

Rheumatoid

Deneb wrote: »

You only need to sell sufficient of your holdings to ensure that there is enough cash in the account to cover the PCLS. The remaining holdings including any cash over and above the lump sum taken will be placed into a SIPP drawdown account.

I recently did this with HL and also left a small part of my SIPP uncrystallised so that I can continue to contribute to it. My drawdown account is still around 90% invested in funds.

Still a bit unclear on this. So you are saying I do not have to sell all holdings. Just enough to cover the 25% tax free withdrawal? If that is the case I guess I'm back to one of my original questions. If my SIPP contains both cash and funds how and when is 25% of the total value calculated? Sorry if I'm being dim