UFPLS question

MGBRoadstar

I would like to withdraw the maximum UFPLS from my SIPP without paying any tax. I don't expect to have any other income during the current year. I think the maximum would be £15,800 of which £3,950 would be tax free and the remaining £11,850 would be taxed using the emergency code. I would then claim this tax back using form p50z.

Can anybody let me know if I've understood this correctly, please?

Linton

MGBRoadstar wrote: »

I would like to withdraw the maximum UFPLS from my SIPP without paying any tax. I don't expect to have any other income during the current year. I think the maximum would be £15,800 of which £3,950 would be tax free and the remaining £11,850 would be taxed using the emergency code. I would then claim this tax back using form p50z.

Can anybody let me know if I've understood this correctly, please?

Nearly right, but its form P55. P50Z only applies if you have emptied your pension pot. See https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-when-youve-stopped-working-and-flexibly-accessed-your-pension#p53zp55

MK62

The figures look right, but I used a form P55 - tbh though there are quite a few P5x forms which all appear to be similar......that said I haven't had a rebate yet, and it's been almost 4 weeks now.......

MGBRoadstar

Thanks guys, it's good to know I'm on the right lines

MGBRoadstar

Here's a follow up question:



Now that I'm in drawdown I can still pay into a SIPP (and get tax relief) but my annual allowance has reduced to £4,000, or £2,880 if I'm a non-taxpayer. As I'm paying some tax but claiming it back again is my allowance £4,000 or £2,880?

drumtochty

It will only be above £2,880 if you earn more than £2,880 net of tax or £3,600 gross this tax year but any pension payments already made this tax year are part of the total you can pay.

clivep

MGBRoadstar wrote: »

Here's a follow up question:



Now that I'm in drawdown I can still pay into a SIPP (and get tax relief) but my annual allowance has reduced to £4,000, or £2,880 if I'm a non-taxpayer. As I'm paying some tax but claiming it back again is my allowance £4,000 or £2,880?

Just to clarify further what drumtochty said...


What you can pay in does not depend on whether or not you are a tax payer. Rather, it depends on your earned income and therefore excludes income from your pension.


As you do not have earned income above £2,880 (net of tax) then you are limited to contributing this figure in the tax year. The reduction of the allowance to £4k for going into drawdown is irrelevant to you as you don't have the earned income for this.

MGBRoadstar

Thanks Clive, all clear now!