Claiming SIPP tax relief BEFORE potential budget change…?

Dazed_and_C0nfused

Sarahspangles said:

Inbetweeners said:

westv said:

Marcon said:

Please could we have a separate board for these endless and pretty pointless questions, which are doing nothing but clog up this board to no good effect.

All we need is a Budget 2024 thread. I mentioned about this last week I think but I guess it won't happen yet.

Or 'Pure Speculation'

It might be handy for future budgets to have a link to each piece of press speculation, and then edit it with ‘Didn’t happen’.

Or even save a bit of time and pre populate it with 'Didn't happen' 😉

lookbook

[Deleted User] said:

Juno_Moneta said:

Ok so I am a higher rate 40% taxpayer. 

I have made personal SIPP contributions in current tax year 2024-25.

i have received the first 20% of gross tax relief back into my SIPP as normal. 

As per prior years I would normally wait until my next Self Assessment eg around May / June 2025 to declare the contributions and get the second 20% of gross tax relief deducted from my tax calculation. 

This year is different. 

Labour are tipped to make changes to pension tax relief in the budget in October. 

So let’s assume they reduce it.

Tax changes are typically ‘with effect from the next tax year’ - so that would be 2025-26. So no impact on current year contributions - fine. 

But … what if due to the need to ‘make difficult decisions’ they announce an immediate change eg from 1st November. 

So the point of my post: Is there an incentive to mitigate this possibility by making a manual claim now via letter or phone to HMRC (which is allowed) rather than waiting until submitting SA next year - with the simple objective of receiving a cheque payment BEFORE the budget?!

Anyone else been thinking about doing this?

No.  While the tax relief rules might change for contributions made from Budget day (unlikely but who knows) there is no chance that tax relief will be prevented for contributions made before the change is announced.  Just to be clear when I say "no chance" I mean "absolutely no chance".

Absolutely 💯 💯 💯 💯 💯 💯 %

MK62

dunstonh said:

Labour are tipped to make changes to pension tax relief in the budget in October. 

Source?  (not media speculation as that has historically been so wrong that often none of what they predict appears in the budget)

Labour is implementing a review of pensions, the outcome of which will lead to changes. They have also said there will be a consultation on that review.

The pensions policy institute estimated that a 20% flat rate would cost £5.8bn and a 33% flat rate would cost £9.6bn.  Whereas the current method costs £9.3bn.   Moving to a single rate won't likely be a money saver but a change who benefits the most.  So, that is another reason why delaying it for the pension review makes more sense.  This budget is about increasing the tax take. No shuffling it around.  Especially in areas that will be addressed in the pension review.       It was also noted that removing higher rate relief would lead to double taxation on higher rate taxpayers that would result in pensions being less used and therefore reduce the tax take during the retirement years.

Labour has told the pension providers that they do not intend a repeat of the Conservative's abolition of the LTA and introduction of the LSA, etc and sufficient time will be given for changes and consultation.

......but if the money doesn't go into a pension now, then it'll be subject to tax....now.....pretty much what the government wants.

AdamJackson1

In order, when selling my free part of my 25% SIPP, to relate the pre-budget rules and terms (pre Nov 30th 2024), is it the point of instruction to sell / the point of the liquidation of the funds being executed / the confirmation of the order received / the settlement?

dunstonh

AdamJackson1 said:

In order, when selling my free part of my 25% SIPP, to relate the pre-budget rules and terms (pre Nov 30th 2024), is it the point of instruction to sell / the point of the liquidation of the funds being executed / the confirmation of the order received / the settlement?

As no changes have been announced and there is no information published, nobody can guess at things that may happen even though they are not expected to happen.

However, the sale of investment funds forms in this hypothetical scenario would not be one of them.  Neither would their settlement.   It would likely be the button press on releasing the money to the bank.   That is the normal line in the sand with respect to deadlines.

artyboy

It's like a flipping echo chamber on here right now...

Sunnylifeover50plan

Conjecture is pretty pointless, we don't have long to wait. I think the only time I might have accelerated TFLS would be if I planned to take it in the next few months anyway and there weren't any factors preventing me from doing so in the next few days.