Crystalising SIPP with commercial property element...

MintyHamster

Hi there - some basic advice needed please, this seems to be very little advice out there about this. I am 54, so heading towards the point where I can begin crystalising my private pension (although still working, no immediate plans to do this). I have two SIPPs, one containing just shares & funds, the second containing just one commercial property that I purchased. I appreciate that I don't need to take the full 25% of the total immediately, and can do so over time, but I'm looking at simplicity - I'm not sure at what point the value of the property is calculated? By that, I mean as they are two separate SIPPs, it would make sense to me at least if I could take 25% from each at different times, as that is still 25% of the total value of both SIPPs. In which case, could I take 25% from the fund SIPP early, and leave the property unsold in the second SIPP? At the point that is sold I could then take 25% of that tax free, the remainder being taxed as per normal? The only other alternative I can see is that the property would need to be sold at the point that the crystalisation of both SIPPs happens, in order to have a defined money amount to the SIPP total (of which 25% can be calculated). I hope that makes sense to someone! Hopefully there are others out there who have done this (and didn't get clobbered by the tax man...). With thanks, any advice is welcome...

Marcon

MintyHamster said:

Hi there - some basic advice needed please, this seems to be very little advice out there about this. I am 54, so heading towards the point where I can begin crystalising my private pension (although still working, no immediate plans to do this). I have two SIPPs, one containing just shares & funds, the second containing just one commercial property that I purchased. I appreciate that I don't need to take the full 25% of the total immediately, and can do so over time, but I'm looking at simplicity - I'm not sure at what point the value of the property is calculated? By that, I mean as they are two separate SIPPs, it would make sense to me at least if I could take 25% from each at different times, as that is still 25% of the total value of both SIPPs. In which case, could I take 25% from the fund SIPP early, and leave the property unsold in the second SIPP? 

Yes. They are, as you say, entirely separate (even if held with the same provider).

MintyHamster said:

At the point that is sold I could then take 25% of that tax free, the remainder being taxed as per normal? 

Yes.

MintyHamster

@ Marcon - Thank you!