Sipp Esa and Tax

Kim1965

Albermarle said:

Sorry to hear about your situation.

I presume that you are named as the beneficiary of your wife's SIPP ?
In which case you would get the SIPP and be able to access it tax free when she has died. 

It could be an alternative way of getting to the same result ?

I am named as the beneficery. What to do with this sipp is what im trying to work out. We do not need it, i work. IF we took it via drawdown we would lose 50p in the pound contributary esa, so its not touched. However if we také it as an un taxed ls (i believe we can do this with ds1500) lump sums do not affect esa. Once its out of the pension would putting into isas be a good idea?? Am i correct thinking an income from isas has no tax? Also i know that taking income from savings does not affect esa. To mě this seems a no brainer? 

Kim1965

MovingForwards said:

Please submit a PIP application, with the support of McMillan etc, if you haven't already done so. It's fast tracked in these circumstances and isn't a means tested benefit.

Macmillen have already sorted pip out. I have to say i am surprised that such non means tested benefits exist. 

Marcon

Kim1965 said:

Albermarle said:

Sorry to hear about your situation.

I presume that you are named as the beneficiary of your wife's SIPP ?
In which case you would get the SIPP and be able to access it tax free when she has died. 

It could be an alternative way of getting to the same result ?

I am named as the beneficery. What to do with this sipp is what im trying to work out. We do not need it, i work. IF we took it via drawdown we would lose 50p in the pound contributary esa, so its not touched. However if we také it as an un taxed ls (i believe we can do this with ds1500) lump sums do not affect esa. Once its out of the pension would putting into isas be a good idea?? Am i correct thinking an income from isas has no tax? Also i know that taking income from savings does not affect esa. To mě this seems a no brainer? 

Correct - income from an ISA is not subject to tax. You do not pay tax on:

• interest on cash in an ISA
• income or capital gains from investments in an ISA

Confirmed here: https://www.gov.uk/individual-savings-accounts/how-isas-work

Why do you want to take the money out of the SIPP now? If the answer is you need some to spend, and will invest the rest, then probably an ISA could be a good idea for the balance - but I'm not sure, if you and your wife then need to draw from the ISA and it is your wife's name, whether that might impact on her benefits. Possibly putting some into an ISA in your name (gifts between spouses are tax free) might be worth considering, assuming ESA isn't based on joint finances (I'm sorry, I don't know enough about benefits to be sure of my ground - I'm making a suggestion which I hope someone else will be able to confirm or correct).

If you inherit your wife's SIPP in due course, it is tax free. See https://www.gov.uk/tax-on-pension-death-benefits

Kim1965

Getting the sipp 75k into isas before april and in the new financial year neatly gets it all away.
 Contributary esa is non means tested. Drawdown from pensions affects it, drawdown from savings does not.
 If her sipp is in isas it can be access ed tax efficient ly if /when i need to stop working and spend more time at home. I think. 

Albermarle

Kim1965 said:

Albermarle said:

Sorry to hear about your situation.

I presume that you are named as the beneficiary of your wife's SIPP ?
In which case you would get the SIPP and be able to access it tax free when she has died. 

It could be an alternative way of getting to the same result ?

I am named as the beneficery. What to do with this sipp is what im trying to work out. We do not need it, i work. IF we took it via drawdown we would lose 50p in the pound contributary esa, so its not touched. However if we také it as an un taxed ls (i believe we can do this with ds1500) lump sums do not affect esa. Once its out of the pension would putting into isas be a good idea?? Am i correct thinking an income from isas has no tax? Also i know that taking income from savings does not affect esa. To mě this seems a no brainer? 

It seems like a good plan. I was only pointing out that if the SIPP was not accessed and left to you, you could take it later tax free anyway. So I guess the end result would be similar.

sandsy

The SIPP can be paid out as a tax free serious ill-heath payment under age 75 if your wife's life expectancy is less than 12 months and a registered medical professional is prepared to provide evidence of her life expectancy to the scheme. It's probably worth contacting the SIPP provider to ask how to get the ball rolling, if she wants to withdraw it.