Sipp drawdown to ifisa

harryb54

Hi
I would like to take my 25% tax free lump sum from my P2P SIPP in the next few weeks and pay the money into my IFISA
However the money is locked in for the next 6 months, so I can’t touch it until the loan is paid back
Is it possible to transfer the lump sum (on paper) from my SIPP into my IFISA , they are both run by the same company

Many thanks for your answers

NottinghamKnight

Ask the company but I wouldn't have thought so. If you swap the p2p element for shares or funds then you would have to sell and rebuy so the same is true for p2p. Also there is no way to fund the 25% cash in this example is there?

HappyHarry

harryb54 said:

Hi
I would like to take my 25% tax free lump sum from my P2P SIPP in the next few weeks and pay the money into my IFISA
However the money is locked in for the next 6 months, so I can’t touch it until the loan is paid back
Is it possible to transfer the lump sum (on paper) from my SIPP into my IFISA , they are both run by the same company

Many thanks for your answers

Why?

Both the SIPP and the IFISA grow tax free, so why not wait until the six months is up and take the 25% tax free then?

dunstonh

Indeed, whilst invested, the pension is potentially more tax-free than the ISA (no inheritance tax).   Using up your 25% TFC to put into an ISA is not usually a good thing to do without good reason (and there can be good reasons but too many do it without a good reason).

harryb54

The reason is because I intend taking 12k in the 20/21 tax year as part of my personal allowance
Am I right in thinking I will get less for my 25% lump sum tax free if I take it after the 12k has been taken out?

NottinghamKnight

harryb54 said:

The reason is because I intend taking 12k in the 20/21 tax year as part of my personal allowance
Am I right in thinking I will get less for my 25% lump sum tax free if I take it after the 12k has been taken out?

Who is this account with?

Notepad_Phil

harryb54 said:

The reason is because I intend taking 12k in the 20/21 tax year as part of my personal allowance
Am I right in thinking I will get less for my 25% lump sum tax free if I take it after the 12k has been taken out?

Suppose you had £100k in there:

If you wait then you can get £25k out tax-free in one go and then get the £12k out which is taxable.

If you want to take 12k out first then don't forget that you can get 25% of it tax free so you can actually take out £16k where £12k is taxable and £4k is tax-free, you then have £84k left on which you can take £21k tax free - so total tax free is £25k.

However would you lose out if you don't use  the 20/21 personal allowance?