Opening a GIA to fund ISA/SIPP fees

hallmark

Never ceases to amaze me how dumb I am but...

Having had a couple SIPPs for awhile now (AJ Bell & Vanguard) it's only just occurred to me that it might be possible to open GIAs & fund them with enough to cover account fees (instead of them coming from within the SIPPs themselves).

I believe this is possible at both places.

Does anybody else do this?  Does EVERYBODY else do this....?

Seems an obvious thing to do and unless I'm missing an equally obvious reason not to I'll set this up.

ColdIron

Many would prefer to pay charges from within the SIPP as it's had tax relief applied rather than pay with taxed money

It's a very good strategy for ISAs though to maximise sheltered assets

cloud_dog

As I have AA bandwidth I prefer to pay additional in to the SIPPs to cover the charges (as it only costs me 80% of the charge due to TR) 

fisher66

I looked at doing this a few years ago with AJ Bell but if I did it with my ISAs they would also do it with my SIPP: it's all or nothing with them, or at least it was. As mentioned above it is more tax efficient for you SIPP fees to be paid within your SIPP by my calculation. 

hallmark

ColdIron said:

Many would prefer to pay charges from within the SIPP as it's had tax relief applied rather than pay with taxed money

It's a very good strategy for ISAs though to maximise sheltered assets

My allowances are maxed out currently so I think that the sums work out better if I use new money (I guess that would ultimately depend on the performance of the SIPP money that I avoided using).

ColdIron

If your fees are say £200 then it would cost you £200 via the GIA but only £160 via the SIPP

If I understand correctly, you are doing well to have used your annual SIPP allowance after only 24 days into the new tax year but perhaps I am missing something

masonic

Like others I prefer to pay fees from within SIPP, but outside ISA (only one of my two S&S ISAs has any ongoing charges). I have left my Fidelity SIPP's 'cash management account' empty to enable this.

boingy

Yep, I pay out of the SIPP too. Tax relief makes it work out cheaper and the fees are low enough to not really impact the SIPP's value (and you can always put in more to cover it if it does).

Albermarle

masonic said:

Like others I prefer to pay fees from within SIPP, but outside ISA (only one of my two S&S ISAs has any ongoing charges). I have left my Fidelity SIPP's 'cash management account' empty to enable this.

Yes, I have done the same. 

mebu60

ColdIron said:

If your fees are say £200 then it would cost you £200 via the GIA but only £160 via the SIPP

If I understand correctly, you are doing well to have used your annual SIPP allowance after only 24 days into the new tax year but perhaps I am missing something

I used mine on the third day of the current tax year. All £2880 of it! 

ColdIron

mebu60 said:

ColdIron said:

If your fees are say £200 then it would cost you £200 via the GIA but only £160 via the SIPP

If I understand correctly, you are doing well to have used your annual SIPP allowance after only 24 days into the new tax year but perhaps I am missing something

I used mine on the third day of the current tax year. All £2880 of it! 

Yes, I do the same but not usually so early. I usually wait until a RS or similar matures. This year I have a PCLS in July from an old workplace pension I stopped paying into in 1984 which is nice