Annual allowance across 2 x SIPPs

spencerroberts

I have two separate SIPP’s with two different providers.

Can I take 25% tax free from one (putting it into drawdown), but continue to contribute max annual allowance (£60k) into the other (as it is not in drawdown)? Thanks

DavidT67

Taking just the Tax Free Lump Sum from a Defined Contribution pension doesn't trigger Money Purchase Annual Allowance.

Makes no difference whether SIPP has moved to drawdown or not, you can still make fresh contributions to the SIPP.

Marcon

spencerroberts said:

I have two separate SIPP’s with two different providers.

Can I take 25% tax free from one (putting it into drawdown), but continue to contribute max annual allowance (£60k) into the other (as it is not in drawdown)? Thanks

Yes, provided you don't trigger the Money Purchase Annual Allowance by 'flexibly accessing' anything more than the 25% tax free. If you do, your annual allowance drops permanently to £10K pa (including tax relief/any employer contributions) across all your pension arrangements.

Albermarle

If the SIPP provider allowed it, you could also continue to contribute to the one you took the 25% tax free from. It is perfectly OK legally/taxwise, but it depends if the providers systems can cope with it.

AlanP_2

Be aware of the recycling rules https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/recycling-of-tax-free-cash/