SIPP vs General Investment Account

Billycock

Would the wonderful HMRC be good enough to give me the 25% contribution 

dunstonh

Pension wrapper beats ISA and GIA in most cases where someone is aged above 55.

Voyager2002

Funds that you deposit into a SIPP are automatically uplifted by the 25% tax rebate: however the maximum you can add to a SIPP is usually your taxable earned income or £2880. If you want to deposit more you don't get the tax rebate and so have to inform HMRC.

And yes, doing this is likely to be sensible for you.

ColdIron

You can't put £40,000 into a SIPP as you are limited to your relevant earnings, usually earned income, of which you have none. You can put £3,600 gross into a SIPP (£2,880 from you and £720 from HMRC)

Investments usually pay dividends not interest. The first £12,570, less any pension income, is tax free. On top of that you have an annual dividend 'allowance' of £2,000 taxed at 0%. So it is unlikely you would pay any tax on the dividends. You would only pay capital gains tax on your gain when you sell (broadly the difference between what you realised on sale less the cost of acquisition) but there is a separate annual exempt amount of £12,300 so you would only pay tax on the gain above this amount

You could open a SIPP anyway for the £3,600 and put the rest in a GIA where you would have to be doing very well to incur any tax. Be aware though that you would need to keep accurate records of any purchases, sales and dividends

bostonerimus

How much do you have set aside in cash for emergencies? You don't have to have everything in the stock market.

Albermarle

ou would only pay capital gains tax on your gain when you sell (

That's assuming there is a gain of course....