Can I Transfer SIPP?

hamptons

If one spouse has a SIPP and the other has just opened one, can they transfer some of the holdings (e.g. holdings in index tracker funds) in their SIPP to their spouse?

Likewise with fund units held in an ISA or with a normal share dealing account?

Other helpful posts on here have highlighted the benefit of both spouses taking up their annual capital gains tax allowance and annual income tax allowance.

So I am interested to know how best to maximize this where all investments are held by one person. If assets can be transferred, what is the process, and is it the same process for SIPP, ISA and share dealing accounts?

xylophone

If one spouse has a SIPP and the other has just opened one, can they transfer some of the holdings (e.g. holdings in index tracker funds) in their SIPP to their spouse?

No. The spouse with the "old" ISA can sell the holdings, take out the cash, give the cash to the spouse with the "new" ISA who can then subscribe it to the new ISA and buy the investments required.

If each spouse held a non-ISA investment account then I suppose it might be possible to transfer "in specie", particularly if both accounts were held on the same platform but you would have to check this with the provider.

But it might be easier all round just to sell, give cash to spouse and for the spouse to re-buy as is the requires procedure with ISA accounts.

p00hsticks

I dont think a platform would allow an in-specie transfer from one person to another so for an ISA or a dealing account, person A would simply sells the shares/funds withi their account, withdraw the cash and give it to person B to invest in their ISA/SIPP/dealing account.

Withdrawal from a SIPP could only be done by putting the pension into drawdown, so person A would need to be 55 or over snd prepared to do that.

Given that ISas are a tax free wrapper, withdrawing from person As ISA to move it into person Bs ISA has no impact (that I can think of) in terms of rebalancing a couple's tax liabilities.

hamptons

OK so for a dealing account, an "in specie" transfer may be possible between spouses. I ask about dealing accounts because they are not tax sheltered, so presumably it would be better if there are gains accrued in a single account (person A) if both person A and person B could use their CGT allowance each year.

If transferred, do the gains (or the right to realize the gains tax free) in an unwrapped dealing account transfer to the new holder? Or are the capital gains "lost" (for the purposes of CGT) when transferring to person B? If so, then obviously transferring un-wrapped funds between spouses would be a very bad idea!

I can see that there may be little benefit in transferring ISA holdings between spouses, but it appears this is not possible anyway.

For the SIPP "Withdrawal from a SIPP could only be done by putting the pension into drawdown". So holdings in a SIPP cannot be transferred to your spouse prior to drawdown? I asked the question because I wondered if person A has a SIPP and B has not, and B wants to start a SIPP but has low income, whether A could gift some of their SIPP fudn holdings to B's SIPP (so all holdings remain SIPPed). But it appears not?

p00hsticks

hamptons wrote: »

If transferred, do the gains (or the right to realize the gains tax free) in an unwrapped dealing account transfer to the new holder? Or are the capital gains "lost" (for the purposes of CGT) when transferring to person B? If so, then obviously transferring un-wrapped funds between spouses would be a very bad idea!

My understanding is that if person A and B are married, then no Capital Gain is crystallised on the transfer - if the recipient later sells the assets then CGT will be calculated from the point at which the asset was first bought by person A (not at the point of transfer)

https://www.gov.uk/capital-gains-tax/gifts

The most tax efficient way I can think of to gradually achieve a redistribution (and I'm not an expert) is for person A to sell up to their CGT allowance from a dealing account and then gift the money to person B to invest in either an ISA or SIPP.

I'm assuming that we are talking dealing accounts here because person As ISA allowances are already being fully used each year.

hamptons wrote: »

For the SIPP "Withdrawal from a SIPP could only be done by putting the pension into drawdown". So holdings in a SIPP cannot be transferred to your spouse prior to drawdown?

As far as I'm aware the only way to do this would be as part of a Pension Sharing Order as the result of a divorce, which would be a bit drastic!.