SIPP withdrawal question

tiddles

During the current tax year I have withdrawn the remaining balance of £6726.53 from a small SIPP, and have also made a first withdrawal of £5734.47 from my main SIPP, thus taking the total withdrawn close to the £12,570 personal allowance. (I have just realised that I could have withdrawn an extra £109, having made a calculation error.)

My question is, could I in fact withdraw 25% of the full original balance of the new SIPP as a tax-free lump sum?

Thank you!

Qyburn

tiddles said:

My question is, could I in fact withdraw 25% of the full original balance of the new SIPP as a tax-free lump sum?

How did you take the £5734.47? If that was the first drawdown the to my knowledge you must have taken some tax free.

Albermarle

tiddles said:

During the current tax year I have withdrawn the remaining balance of £6726.53 from a small SIPP, and have also made a first withdrawal of £5734.47 from my main SIPP, thus taking the total withdrawn close to the £12,570 personal allowance. (I have just realised that I could have withdrawn an extra £109, having made a calculation error.)

My question is, could I in fact withdraw 25% of the full original balance of the new SIPP as a tax-free lump sum?

Thank you!

You can not take taxable income, without taking some tax free at the same time or beforehand. So not sure what has actually happened here.

Dazed_and_C0nfused

It seems likely the taxable amounts are £6726.53 and £4,300.85 but I guess only the op knows for certain.

And any remaining Headroom will depend on whether their Personal Allowance is £11,310 or £12,570?

tiddles

Thank you - I’m not sure what has happened either! 

My personal allowance is £12,570. 

So it seems that 25% of the £5734.47 will be tax-free, meaning that I have used up £11027.39 of my personal allowance for the current tax year (£6726.53 + £4300.86). 

I am confused as to how I calculate the amount I can withdraw to bring me up to the tax-free limit here, as I would prefer to include a tax-free amount if possible, so £1542.61 +?

Scrounger

tiddles said:

Thank you - I’m not sure what has happened either! 

My personal allowance is £12,570. 

So it seems that 25% of the £5734.47 will be tax-free, meaning that I have used up £11027.39 of my personal allowance for the current tax year (£6726.53 + £4300.86). 

I am confused as to how I calculate the amount I can withdraw to bring me up to the tax-free limit here, as I would prefer to include a tax-free amount if possible, so £1542.61 +?

£514.20   (£1542.61 + 514.20 = £2056.81 Total additional withdrawal)

(2056.81 x 0.75  =  £1542.61)

(6726.53 + 4300.84 + 1542.61 =  £12,569.98


Scrounger

tiddles

Thank you so much, Scrounger.