25% TFLS - what happens to the 75%

MallyGirl

Sea_Shell said:

MallyGirl said:

You can tax just over £16k each year and pay no tax if it is your only income - 25% of the drawdown being tax free and the remaining £12,500 being within the personal allowance. I wouldn't take the full 25% tax free lump sum unless you need it. It is wise to have some cash on hand so you don't have to sell investments in a slump.

Unless your TFLS is just enough to fill you and your OHs ISAs, which is what we're planning on doing.
It'll still be invested, just in a different wrapper.
Then any future growth on that lump remains tax free.

It would probably have been better to say don't take the 25% tax free lump sum unless you have a plan for it

[Deleted User]

tigerspill said:

Apologies if this question is too far removed from the original topic.
My OH has an HL SIPP - all in cash.  This was set up purely as a short term measure to put large amounts of her salary in before she stopped work and the to withdraw this tax free to utilise several years of £12500 tax free income before starting het DB pension (which will be above the tax free allowance).
She stopped work this FY.  The final payment she will be making is £2880/£3600 on around 6th April (next FY).  The tax is added on 21st June.
In 2021/22 FY, the plan is to withdraw 25% PLUS £12500 and pay no tax.
And then withdraw £12500 (or what ever the allowance is) for three more years to reduce the account to zero.
The aim is to pay no tax on the way out.  She has no plans for any earnings during this time.
So the plan is to take the 25% TFLS and put the remaining 75% into "flexible drawdown".
Then to withdraw a further £12500.
Am I doing the right thing from a technical perspective?  Have I got the terminology right?  I am just preparing what it is we need to tell HL.  I am not sure f the exact process/steps.
Can the 25% TFLS and the £12500 be withdrawn at the same time or must it be two separate transactions. Can they be done on the same day?
Thanks for any help  

Most of your questions are answered very well on the HL web site (and go to the bottom of the page for other questions on how it is going to be taxed) - most other SIPP providers operate the same
https://www.hl.co.uk/retirement/drawdown/payment-calendar

tigerspill

Deleted_User said:

tigerspill said:

Apologies if this question is too far removed from the original topic.
My OH has an HL SIPP - all in cash.  This was set up purely as a short term measure to put large amounts of her salary in before she stopped work and the to withdraw this tax free to utilise several years of £12500 tax free income before starting het DB pension (which will be above the tax free allowance).
She stopped work this FY.  The final payment she will be making is £2880/£3600 on around 6th April (next FY).  The tax is added on 21st June.
In 2021/22 FY, the plan is to withdraw 25% PLUS £12500 and pay no tax.
And then withdraw £12500 (or what ever the allowance is) for three more years to reduce the account to zero.
The aim is to pay no tax on the way out.  She has no plans for any earnings during this time.
So the plan is to take the 25% TFLS and put the remaining 75% into "flexible drawdown".
Then to withdraw a further £12500.
Am I doing the right thing from a technical perspective?  Have I got the terminology right?  I am just preparing what it is we need to tell HL.  I am not sure f the exact process/steps.
Can the 25% TFLS and the £12500 be withdrawn at the same time or must it be two separate transactions. Can they be done on the same day?
Thanks for any help  

Most of your questions are answered very well on the HL web site (and go to the bottom of the page for other questions on how it is going to be taxed) - most other SIPP providers operate the same
https://www.hl.co.uk/retirement/drawdown/payment-calendar

Thank you.  I will take a look.