Wow - that was quick

jamesd

Scrounger wrote: »

I asked HL (Jess Jones) about this earlier this year and they flatly would not entertain it!

She checked TWICE with colleagues and maintained that it wasn't allowed to use small pot from flexi-access funds. :eek:

HMRC manual suggests that it should be possible.

Care to put them straight for us James?

As you say, HMRC seems clear. And Hargreaves Lansdown to be inventing rules that don't exist.

HMRC: PTM063700 Member benefits: lump sums: small pension payments

Payments under a scheme that is not an occupational or public service pension scheme

"If a member has a small amount of benefit rights (whether the rights are uncrystallised or comprise a pension in payment) in a registered pension scheme, and that scheme is not a public service pension scheme or an occupational pension scheme, it is possible for those benefit rights to be paid as an authorised member payment in the form of a one-off lump sum to the member without the need for that lump sum to satisfy the test for a trivial commutation lump sum."

Taxation

"This means that where the payment represents uncrystallised benefit rights, 25% of the payment is free of income tax, and the balance of the payment is chargeable to income tax as pension income. Alternatively, if the payment represents crystallised rights, all of the payment is chargeable to income tax as pension income. Where the payment represents a mixture of both uncrystallised and crystallised benefit rights only 25% of the part of the payment relating to the uncrystallised rights can be paid free of income tax."

So clearly HMRC is explicit that either crystallised or uncrystallised pots can be used.

What HL appear to have asserted with you is that a flexi-accesss drawdown arrangement has some additional restriction. So what's needed is some basis for believing that a flexi-access drawdown arrangement is somehow different from other arrangements.

HMRC is also clear that splitting is OK:

"where a member has funds in excess of the limit in an existing single arrangement some of which are then moved into arrangements set up for the purpose of allowing a member to take one or two/three small lump sum payments under Regulation 11A, this will involve the setting up of one or more new arrangements"

Which is what HL did for ffacoffipawb.

ffacoffipawb

jamesd wrote: »

As you say, HMRC seems clear. And Hargreaves Lansdown to be inventing rules that don't exist.

HMRC: PTM063700 Member benefits: lump sums: small pension payments

Payments under a scheme that is not an occupational or public service pension scheme

"If a member has a small amount of benefit rights (whether the rights are uncrystallised or comprise a pension in payment) in a registered pension scheme, and that scheme is not a public service pension scheme or an occupational pension scheme, it is possible for those benefit rights to be paid as an authorised member payment in the form of a one-off lump sum to the member without the need for that lump sum to satisfy the test for a trivial commutation lump sum."

Taxation

"This means that where the payment represents uncrystallised benefit rights, 25% of the payment is free of income tax, and the balance of the payment is chargeable to income tax as pension income. Alternatively, if the payment represents crystallised rights, all of the payment is chargeable to income tax as pension income. Where the payment represents a mixture of both uncrystallised and crystallised benefit rights only 25% of the part of the payment relating to the uncrystallised rights can be paid free of income tax."

So clearly HMRC is explicit that either crystallised or uncrystallised pots can be used.

What HL appear to have asserted with you is that a flexi-accesss drawdown arrangement has some additional restriction. So what's needed is some basis for believing that a flexi-access drawdown arrangement is somehow different from other arrangements.

HMRC is also clear that splitting is OK:

"where a member has funds in excess of the limit in an existing single arrangement some of which are then moved into arrangements set up for the purpose of allowing a member to take one or two/three small lump sum payments under Regulation 11A, this will involve the setting up of one or more new arrangements"

Which is what HL did for ffacoffipawb.

You cannot actually see a new arrangement or anything like that, just a small pot payment to me of £8,500 and a tax payment of £1,500 from my SIPP account. This new arrangement must be purely behind the scenes.

bowlhead99

ffacoffipawb wrote: »

A week today I filled a form in on Hargreaves Lansdown's website to transfer a Standard Life Active Pension to my Hargreaves Lansdown SIPP.

The money was credited today.

Seven days.

Impressive.

Back on that original topic - I made a request to do a transfer from Scottish Widows last Thursday (4 Jul) to my SIPP, using a form on the AJBell YouInvest website. It was a partial transfer as cash. I was surprised to see the funds credited to my account yesterday (Tues 9th) and available to trade. According to my unit history at SW, the units were redeemed Thursday 4th (or at least at that day's unit price).

Before doing the transfer I had called SW to remind myself of the process (I had done it before, but couldn't quite remember if I needed to fill out any of SW's own paperwork to discharge their responsibilities- I think I did last time). The customer service person mentioned that if the receiving scheme were on the [I forget the name] system it would be quick for a partial cash transfer, but sent me their forms anyway so I could include them when I signed and sent off the receiving scheme's form.

I the end, when I went to fill out the AJ Bell form (expecting to print and sign as I'd done last time), it was just an online submission while logged into the account.

So from filling in the online form Thursday late afternoon/evening, and no messing around with printing and going to a post box, I had an email the following Tuesday morning at 10am saying they had received the funds. Which can take a business day to show on the account, but as mine was showing that afternoon, and as settlement on shares or fund purchases is T+2 or 3 anyway I could deal without waiting for anything to 'clear' or spending long out of the market at all.

Far better than the bad old days when firms communicated with their rivals via carrier pigeon and would have scope to 'lose the paperwork'.

_pete_

I've had the carrier pigeon experience twice in the last 12 months when transferring a fund from A J Bell to IWeb. Took several months on each occasion and the range of foul-ups was so extensive that both companies refunded my fee for the first transfer.

jamesd

ffacoffipawb wrote: »

You cannot actually see a new arrangement or anything like that, just a small pot payment to me of £8,500 and a tax payment of £1,500 from my SIPP account. This new arrangement must be purely behind the scenes.

Yes, and as far as I know the only way they were able to pay you was doing it via such a behind the scenes new arrangement.

ffacoffipawb

jamesd wrote: »

Yes, and as far as I know the only way they were able to pay you was doing it via such a behind the scenes new arrangement.

I got £8,500 clear with £1,500 going to HMRC for the small pot tax (20% of the 75% left after taking PCLS).

That's all that they deducted from my account. No charge was made for this service. I guess because they make enough out of me elsewhere. :rotfl:

Will do the same next tax year and the one afterwards.

jamesd

That's quite nice lack of charging.

DairyQueen

ffacoffipawb wrote: »

A week today I filled a form in on Hargreaves Lansdown's website to transfer a Standard Life Active Pension to my Hargreaves Lansdown SIPP.

The money was credited today.

Seven days.

Impressive.

Not so impressive experience...

On 26th June I initiated a transfer of my HL SIPP* to an existing AJ Bell SIPP. This was a bog-standard, cash transfer. AJ Bell has been reporting the final status: 'awaiting cash' for the last week.

Still waiting.

The transfer from Aviva to OH's AJ Bell SIPP took 10 days.

*Nothing to do with the Woodford debacle.

saver_ali

I kicked off a transfer from Mercers to HL 6 weeks ago, and it's been very slow going. The money is still invested with Mercers, so will take some time yet. From past experiences, my opinion of Mercers is very low - I'll be glad to get this pension away from them. Sadly we also have a DB pension with them, so will be stuck with them forever.

ffacoffipawb

saver_ali wrote: »

I kicked off a transfer from Mercers to HL 6 weeks ago, and it's been very slow going. The money is still invested with Mercers, so will take some time yet. From past experiences, my opinion of Mercers is very low - I'll be glad to get this pension away from them. Sadly we also have a DB pension with them, so will be stuck with them forever.

I used to work for Mercer Fraser (as it was then) many years ago. Not a great experience.