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Withdrawing From A SIPP
NorthernGeezer_2
Posts: 174 Forumite
My wife makes a maximum contribution from her salary (£8k) to a SIPP to take advantage of the tax breaks.
Given that her salary is in fact £8k/year, can she withdraw £3850 from said SIPP which will keep her under the personal tax threshold?
Given that her salary is in fact £8k/year, can she withdraw £3850 from said SIPP which will keep her under the personal tax threshold?
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Comments
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She would need to convert it to drawdown to take out benefits and would then be limited to £4K limit on contributions.We have a climate emergency and need to re-think investing strategies to avoid sectors that are part of the problem such as oil & gas and embrace climate-friendly options such as renewable energy.0
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If she did that, she wouldnt be able to pay in £8k to the SIPP any more. She would be limited to just £4k.
Also, £3850 would keep her within the personal allowance but so would £5133. (as 25% is tax free, the 75% taxable then equals £3850).I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Is she actually earning £8K and paying £8K to the SIPP? If so, doesn't that take her over the maximum contribution she can make, bearing in mind the provider claims basic rate tax relief (even for non-taxpayers) and adds this to her SIPP?0
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Thanks for the response, the plan was for her to contribute all her salary in to the SIPP for the tax benefit.
She's due to retire October 2021, i forgot about the drawdown issues so its back to our original plan, full salary contribution.
Brynsam-Its £8k gross which includes the tax benefit.0 -
I needs to be 80% of her salary, as there is TR on top added by HRMC. So if you earn 8K. you cant put 8K in. You put 6400 in, and 1600 is added.0
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