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Managing Pension LTA with ISA allowance ?
hyperhypo
Posts: 179 Forumite
Technical question regarding dealing with a notional SIPP close to or exceeding LTA for an individual with unused ISA allowances.
Assuming individual is not using any ISA allowance, is it permissible to transfer monies from SIPP into ISA up to limit, for individual and spouse, with aim of maintaining value of SIPP below LTA limit ?
i.e manage LTA though filling ISAs .
If this is permissible , how is it done ?
Assuming individual is not using any ISA allowance, is it permissible to transfer monies from SIPP into ISA up to limit, for individual and spouse, with aim of maintaining value of SIPP below LTA limit ?
i.e manage LTA though filling ISAs .
If this is permissible , how is it done ?
0
Comments
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Are they over 55?0
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There's no connection between SIPPs and ISAs. If over 55, you can withdraw income from SIPP, paying any taxes appropriate for SIPP withdrawals, and do what you like with the money, including putting it in an ISA. Taking more income than you need to live can be a way to reduce your SIPP balance during drawdown, so as to avoid being over the LTA limit for the second test at age 75. It doesn't help you with the initial LTA test, you can only withdraw money after it has passed through the LTA test at crystallisation.0
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ISA contributions have to be made from personal cash, so it isn't possible to transfer directly from a SIPP into an ISA. You'd need to make a withdrawal from the pension, which will be treated in exactly the same way as any other withdrawal, then make a contribution to the ISA, which will be treated in exactly the same way as any other contribution. The two transactions are entirely unconnected for calculation and tax purposes.Technical question regarding dealing with a notional SIPP close to or exceeding LTA for an individual with unused ISA allowances.
Assuming individual is not using any ISA allowance, is it permissible to transfer monies from SIPP into ISA up to limit, for individual and spouse, with aim of maintaining value of SIPP below LTA limit ?
i.e manage LTA though filling ISAs .
If this is permissible , how is it done ?
Managing the lifetime allowance is tricky, and unfortunately it's not (usually) as simple as using another product to work around the issue.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Thanks everyone so far...i thought it was too straightforward to be possible as well ...it doesn't apply to me either btw... !0
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