SIPP Commercial Property - Rent Received by SIPP after draw down

Stahlfresser

Hello 
If you start to take taxable  income from a commercial property sipp is there any restrictions on the rent the SIPP receives from the commercial property ie does it remain tax free etc

Malthusian

The SIPP stilll receives the rent free of tax.
The most immediate tax issue, apart from the tax on the income itself, is that you trigger the Money Purchase Annual Allowance and your pension contributions will be restricted to £10,000pa with no carry forward (except to defined benefit schemes).

Stahlfresser

Thank you for the clarification, I was planning not to make any more contribution and instead allow the rent from the commercial property to grow the pension pot, which will exceed the amount I take from the pot. I understand the commercial property will be free from iht, is this also the case for pension pot generated from the rent received. Many thanjs

Marcon

Stahlfresser said:

Thank you for the clarification, I was planning not to make any more contribution and instead allow the rent from the commercial property to grow the pension pot, which will exceed the amount I take from the pot. I understand the commercial property will be free from iht, is this also the case for pension pot generated from the rent received. Many thanjs

Currently free from IHT (but legislation very much under review). If you are aged at least 75 when you die, then SIPP assets will be subject to income tax (marginal rate) in the hands of the inheritor as and when they withdraw them.