Can I get the whole lot without paying tax?

Daveinlincoln

I have £102k in a SPP.
I turn 55 next month.
I am not currently working or claiming benefits.
Can I take 25% tax free in mid March on my 55th Birthday (£25,500)
And then take £12500 a year for 6 years therefore paying no tax and getting the whole lot?
Is this possible?
Thanks for any advice/opinions. 

Daveinlincoln

Just to add i wouldn't be working in those 6 years so this would be my only income.

TcpnT

In a word  - Yes

Dazed_and_C0nfused

Or you could take £16,666/year, being 25% TFLS and 75% taxable income.

Daveinlincoln

Dazed_and_C0nfused said:

Or you could take £16,666/year, being 25% TFLS and 75% taxable income.

I'm not sure i follow.....why would i do that?

Dazed_and_C0nfused

It's just an option.

Your plan is to take £25,500 as a TFLS leaving £76,500 and then £12,500/year thereafter.  Will this £76,500 be in cash or invested?

If it is invested then by spreading the TFLS out you can potentially take more tax free money.

Year 1 you take £16,666 leaving £85,334 still invested.

It's not necessarily better, a lot depends on why you are taking the TFLS in the first place.  If you are just going to put it in the bank or invest it in similar things to your SIPP spreading things out over a longer period may be a better option.

Xbigman

Which does rather beg the question, what will you use for income from 61 to SPA at 67?

Darren

triplea35

Yes and if you have not used your full personal allowance for this tax year 20/21 then withdraw sufficient in March on your birthday. The personal allowance for 21/22 will be £12570. If you draw that in one lump sum you will be heavily taxed and have to claim it back from HMRC so maybe better to consider drawing 1/12th each month.
If you have spare cash consider putting £2880 back into your SIPP each year which will be boosted by HMRC to £3600. Over 6 years you would be £4320 better off and £1080 could be taken as TFLS.