using my tax free lump sum as a short teem loan to myself

NeilC1965

Hi All,
many thanks for your responses. I appreciate that I cannot pay back into my dc pot and receive tax relief on the full amount (which would be a great if I could!!). Is it possible to pay back the money into my dc pot and receive no tax relief ? I would then be back where i started in terms of DC fund, but would have used up some of my tax free allowance

cfw1994

Your relative has already passed away....are you expecting probate to take more than 11 months to clear? Sounds like plenty of time to me?

Otherwise, why not use the inheritance for the property purchase?
(I must be missing something obvious here!)

bolwin1

NeilC1965 wrote: »

Hi All,
many thanks for your responses. I appreciate that I cannot pay back into my dc pot and receive tax relief on the full amount (which would be a great if I could!!). Is it possible to pay back the money into my dc pot and receive no tax relief ? I would then be back where i started in terms of DC fund, but would have used up some of my tax free allowance

This sounds like a bad idea to me - getting no tax relief on the way in & paying either 20% or 40% tax when you withdraw it will only benefit the taxman.

Your best bet would be to put as much as you can into an ISAs & deposit / invest the rest. If you are keen on copying the investments that you are using in your pension, just select accounts that let you do that. There's nothing magic about a DC pension - it's just money invested in various ways - it's only the tax advantages that make it worthwhile doing.

Audaxer

NeilC1965 wrote: »

Hi All,
many thanks for your responses. I appreciate that I cannot pay back into my dc pot and receive tax relief on the full amount (which would be a great if I could!!). Is it possible to pay back the money into my dc pot and receive no tax relief ? I would then be back where i started in terms of DC fund, but would have used up some of my tax free allowance

If you are able to do that, when you take the money from the DC pot it would be subject to tax, whereas if as much as possible went into an S&S ISA over a few years, then no matter how much investment growth you subsequently gained, you wouldn't be liable for any tax on withdrawals. You just need to think of the S&S ISA as part of your total pension, rather than thinking you have reduced your pension.

NeilC1965

cfw1994 wrote: »

Your relative has already passed away....are you expecting probate to take more than 11 months to clear? Sounds like plenty of time to me?

Otherwise, why not use the inheritance for the property purchase?
(I must be missing something obvious here!)

Hopefully we can use the inheritance before I would need to dip into my pension which would obviously be preferable. These things can take a lot of time depending on solicitors, probate and the IR!

Dox

NeilC1965 wrote: »

Hi All,
many thanks for your responses. I appreciate that I cannot pay back into my dc pot and receive tax relief on the full amount (which would be a great if I could!!). Is it possible to pay back the money into my dc pot and receive no tax relief ? I would then be back where i started in terms of DC fund, but would have used up some of my tax free allowance

If you are certain (or roughly certain) of the timing/amount of your inheritance, there should be no issue in getting a short term loan from a commercial lender. Even taking professional fees and interest into account, this is likely to be a lot cheaper than the rather convoluted route you are considering.