Ad hoc draw-down from SIPP?

NoMore

Thanks, dazed and confused I ignored emergency tax (doh!), as you say I believe my figures are correct once the correct tax code is used and that the tax free allowance is already taken up by other income.

Dazed_and_confused

They look right to me once the BR code is in place.

k6chris

Thanks all - great input as always. It's not urgent yet, but wanted to get my head straight about how it would work - you think you understand something, then you start to question yourself!


Thanks again!

squirrelpie

It's not urgent yet, but wanted to get my head straight about how it would work

One trick that can be used is to make a small initial drawdown, which triggers the provider to inform HMRC, which triggers HMRC to issue a tax code. Then when you start to make other more substantial drawdowns there's no emergency tax problem. Since you have time, you could do this. Be aware as others have said that making a drawdown will affect charges etc.

kidmugsy

k6chris wrote: »

We are in the fortunate position that our core retirement funding is coming from 3 DB pensions, which will need to be supplemented by our SIPPs for things like holidays / car costs / one-off payments etc. At all stages we will remain basic rate tax payers. So far we have been using savings to do this top up but at some point we will want to use the SIPP.

If one of you should die before 75 the survivor would then have tax-free access to the unused SIPP money of the deceased (assuming you've done the paperwork properly).

So there's a case for leaving the tax-exposed part of the SIPPs as large as possible until you've passed 75. In other words, there's a case for drawing the SIPPs TFLSs first, and the other 75% later.

The counter argument is political risk. If the basic rate of tax should rise above 20% (hello, Mr Corbyn!) then you might feel a chump not to have drawn it down sooner. Ditto if the ability to leave it to your widow/widower tax-free were withdrawn.