Maximum SIPP withdrawal without 40% tax

lollynerd

Hello all,
This may be a very simple question for some of you, but it could be costly if I get it wrong.

How much can I withdraw from my SIPP per year, including my 25% tax free amount, without incurring more than 20% income tax?

Is it...

a) £50,270 - Because that's the income tax band.
or
b) £66,859. - Because I get 25% tax free and then the remaining £50,270 fits into the 20% band.

If this is explained on an HMRC site or maybe a pension company site, please include a link.

Thanks in advance.

Dazed_and_C0nfused

You are overcomplicating things, HMRC aren't interested in non taxable income.

So if you have no other taxable income (and aren't Scottish resident) you can take £50,270.

eskbanker

In principle it's b) if you have no other income (and don't live in Scotland) but I make the gross figure £67,026 (£50,270 / 0.75).

lollynerd

Hi Eskbanker,
Thanks for your clear and helpful response.
Much appreciated.

MK62

Is your personal allowance the full £12570? (assuming you don't live in Scotland where it's a bit more involved)

lollynerd

Yes, it is the full £12,570.

I found a good tool on the Aviva web site that confirms the reply from Eskbanker.

Here's the tool in case it's useful for others. You don't need a login.

https://www.direct.aviva.co.uk/myfuture/PensionWithdrawalTaxCalculator/