Tax code for my private pension due 9 March 2024

traceyaj

My GMPF pension is due to be paid shortly, my current taxable income is from a small amount of savings and income from a SIPP. £1260 of my tax allowance has been transferred to my husband.  The remaining £11310 tax allowance if fully allocated to HARGREAVES LANSDOWN. The usual income from this SIPP is around £720 per year. The GMPF pension will be around £8k per year and so my total income is well below my tax allowance. I really don't know how to go about making sure I pay no tax on the GMPF pension. I cannot open a online tax account either. I presume that I will be taxed using an emergency code on the GMPF pension. Any advice on what I need to do next would be very welcome. 

zagfles

Phone HMRC and ask them to allocate say £10k of your tax allowance to the GMPF and £1k to HL. 

When you say "usual income" from the SIPP, do you mean you're drawing down that amount, or the income generated from investments in the SIPP? It's only the former that is taxable income, ie what you actually choose to drawdown. Income generated from investments in the SIPP is not taxable income. It can be confusing as income is used in two senses. 

Marcon

traceyaj said:

My GMPF pension is due to be paid shortly, my current taxable income is from a small amount of savings and income from a SIPP. £1260 of my tax allowance has been transferred to my husband.  The remaining £11310 tax allowance if fully allocated to HARGREAVES LANSDOWN. The usual income from this SIPP is around £720 per year. The GMPF pension will be around £8k per year and so my total income is well below my tax allowance. I really don't know how to go about making sure I pay no tax on the GMPF pension. I cannot open an online tax account either. I presume that I will be taxed using an emergency code on the GMPF pension. Any advice on what I need to do next would be very welcome. 

If it's due on 9 March it may not be realistic to believe that will give HMRC time to send GMPF a tax code for you.

If that proves to be the case, see https://www.gov.uk/claim-tax-refund

traceyaj

zagfles said:

Phone HMRC and ask them to allocate say £10k of your tax allowance to the GMPF and £1k to HL. 

When you say "usual income" from the SIPP, do you mean you're drawing down that amount, or the income generated from investments in the SIPP? It's only the former that is taxable income, ie what you actually choose to drawdown. Income generated from investments in the SIPP is not taxable income. It can be confusing as income is used in two senses. 

Thanks, I usually do the £2800 investment in the Sipp and withdraw this and the tax relief generated, on a regular annual basis.  

squirrelpie

traceyaj said:

I usually do the £2800 investment in the Sipp and withdraw this and the tax relief generated, on a regular annual basis.  

So you are withdrawing £3600 from the HL SIPP every year and not the £720 you stated originally? That would make a difference to your tax situation.

Albermarle

Marcon said:

traceyaj said:

My GMPF pension is due to be paid shortly, my current taxable income is from a small amount of savings and income from a SIPP. £1260 of my tax allowance has been transferred to my husband.  The remaining £11310 tax allowance if fully allocated to HARGREAVES LANSDOWN. The usual income from this SIPP is around £720 per year. The GMPF pension will be around £8k per year and so my total income is well below my tax allowance. I really don't know how to go about making sure I pay no tax on the GMPF pension. I cannot open an online tax account either. I presume that I will be taxed using an emergency code on the GMPF pension. Any advice on what I need to do next would be very welcome. 

If it's due on 9 March it may not be realistic to believe that will give HMRC time to send GMPF a tax code for you.

If that proves to be the case, see https://www.gov.uk/claim-tax-refund

From previous threads I understood that until the first payment has been made, HMRC can not do anything, as the pension  provider is not registered to your personal tax account, They can not pre emptively send out tax codes to potential pension providers.
I might be wrong but I thought I had seen that stated previously.

zagfles

traceyaj said:

zagfles said:

Phone HMRC and ask them to allocate say £10k of your tax allowance to the GMPF and £1k to HL. 

When you say "usual income" from the SIPP, do you mean you're drawing down that amount, or the income generated from investments in the SIPP? It's only the former that is taxable income, ie what you actually choose to drawdown. Income generated from investments in the SIPP is not taxable income. It can be confusing as income is used in two senses. 

Thanks, I usually do the £2800 investment in the Sipp and withdraw this and the tax relief generated, on a regular annual basis.  

What, as a UFPLS? If you're taking a £3600 UFPLS then that's £2700 of taxable income, so you'd need to ask HMRC to allocate £2700 to the HL SIPP and the rest to the GMPF, that should avoid tax on both unless the GMPF goes over about £8600

traceyaj

squirrelpie said:

traceyaj said:

I usually do the £2800 investment in the Sipp and withdraw this and the tax relief generated, on a regular annual basis.  

So you are withdrawing £3600 from the HL SIPP every year and not the £720 you stated originally? That would make a difference to your tax situation.

Yes, Sorry I am withdrawing £3600 per year. I follow what you are saying and now realise that I need to allocate £3600 of my tax code to HL.  

MallyGirl

traceyaj said:

squirrelpie said:

traceyaj said:

I usually do the £2800 investment in the Sipp and withdraw this and the tax relief generated, on a regular annual basis.  

So you are withdrawing £3600 from the HL SIPP every year and not the £720 you stated originally? That would make a difference to your tax situation.

Yes, Sorry I am withdrawing £3600 per year. I follow what you are saying and now realise that I need to allocate £3600 of my tax code to HL.  

only 75% of £3600 as the other 25% is tax free

traceyaj

traceyaj said:

squirrelpie said:

traceyaj said:

I usually do the £2800 investment in the Sipp and withdraw this and the tax relief generated, on a regular annual basis.  

So you are withdrawing £3600 from the HL SIPP every year and not the £720 you stated originally? That would make a difference to your tax situation.

Yes, Sorry I am withdrawing £3600 per year. I follow what you are saying and now realise that I need to allocate £3600 of my tax code to HL.  

Sorry again , probably about £2700 to HL 

traceyaj

I have another little query on this as I have about £1100 cash in the SIPP. I have no plans to invest this and need to consider whether or not to draw most of it out before the tax year end. Could I do this as a further UFPLS? I have already made one UFPLS with HL this tax year. I will find out how much I need to leave the SIPP open.