Splitting Sipp drawdown

balbs

Looking at retirement Sipp (I have some DB bedrock monies as well) I was thinking of splitting this 50/50, half taking the tax free amount straight away (I don't need access to all of that tax free money), and the other half taking taxable amounts as I go along... its not the immediate calculations or how it works that I have any concern about as with OH will have more than enough for lifestyle, rather is there any factors anyone else thinks I should be thinking about that I may have overlooked, thx

Linton

You can split a SIPP into multiple tranches, and then treat each tranche separately - take its TFLS and then the taxable money. What you cant do is to take taxable money first and the corresponding TFLS later.


Depending on the amount of money involved, another way of achieving what you want would be to take the whole TFLS and put it into an S&S ISA, or his and hers S&S ISAs, perhaps with the same set of investments as the SIPP.

waveydavey48

I hope the OP doesn't mind me digressing a bit as this has direct bearing on my situation. I want to take advantage of my personal allowance in the 20/21 tax year but leave the TFLS in case I need that (we may be moving house in a year or two).

I believe I can take £16,666 via UFPLS ie 25% tax free and the remaining £12,500 wouldn't be taxed as that is my personal allowance.

Would doing so mean that I can't then take 25% of my remaining pot (which would then be about £150k) tax free and leave the rest invested?

So to summarise, can I take £16,666 via UFPLS then take 25% of the remaining pot tax free a year or 2 afterwards?

Apologies to OP if I have hi-jacked your thread, I will start a fresh thread if necessary.

Thanks.

Albermarle

I was thinking of splitting this 50/50,

It's not really clear ( to me anyway ) what you mean by this . Do you mean first splitting your pot into two separate SIPPS ?

So to summarise, can I take £16,666 via UFPLS then take 25% of the remaining pot tax free a year or 2 afterwards?

That will be OK , as long as your provider has the flexibility to offer UFPLS and drawdown . Probably would be best just to run it past them first though.

Linton

waveydavey48 wrote: »

I hope the OP doesn't mind me digressing a bit as this has direct bearing on my situation. I want to take advantage of my personal allowance in the 20/21 tax year but leave the TFLS in case I need that (we may be moving house in a year or two).

I believe I can take £16,666 via UFPLS ie 25% tax free and the remaining £12,500 wouldn't be taxed as that is my personal allowance.

Would doing so mean that I can't then take 25% of my remaining pot (which would then be about £150k) tax free and leave the rest invested?

So to summarise, can I take £16,666 via UFPLS then take 25% of the remaining pot tax free a year or 2 afterwards?

Apologies to OP if I have hi-jacked your thread, I will start a fresh thread if necessary.

Thanks.

Yes, you can do that as the UFPLS tax free 25% corresponds to the UFPLS taxable (though not actually taxed) amount. So 25% of the remaining money can be takes as its TFLS prior to taking the taxable portion.