LGPS, SIPP & tax

Sharktail

hi 
im aware if I don’t take a TFLS from my SIPP I can withdraw annually  £1666 and not pay tax but what I’m puzzled is if I’m receipt of my LGPS can I still withdraw from the two to total 16666, I won’t be any taking any TFLS on LGPS other than the pre 2008 (which I have to apparently) 
thanks

Linton

To keep paying zero tax under UFPLS, if some of your tax allowance is being used by LGPS then that will reduce the SIPP taxable portion which in turn will reduce the SIPP tax free lump sum.

So for example if LGPS was £4500 that would leave £8000 taxable from the SIPP which would correspond to £2666 additional tax free giving you a total of £15166.

Sharktail

Thanks for the reply I understand the sipp part but why the two combined don’t add up to £16666,does none of the LGPS have the facility for UFPLS ?

Linton

UFPLS is a type of drawdown direct from your pension pot 25% of which is tax free.  LGPS pay you a pension which is simply income like wages.   Wages dont have 25% tax free.  The LGPS itax free payment is a one-off lump sum that you must take prior to taking the income.

Sharktail

Thanks Linton you’ve explained it well now I understand 

OldBeanz

Hopefully you will have discounted that you can open an AVC linked to your LGPS and pay in taxable income which you would be able to draw out tax free when you take your pension (the equivalent of 25% tax free). Getting a 25% uplift in contributions is a very generous LGPS benefit almost unique in Government pensions.