SIPP Charges AJ BELL and Interactive Investor ?

segovia

I have two SIPPS, AJ BELL and II. 

I pay in a regular £25.00PM to AJ Bell to cover the monthly costs, account charge for shares and any other trading costs. I get tax relief on my £25.00 which is £6.25. 

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

bjorn_toby_wilde

Does seem unusual. AJ Bell collect my SIPP charges from cash in the account so normally that’s already had tax relief applied.

This year I inadvertently invested too much and didn’t have enough to cover the fees. I opened a GIA and put some cash into that to cover the fees. I I was already up to the annual limit though (£3600) so if I put in extra cash to the SIPP it would cause problems with tax.

Scrudgy

If you are paying £21.99 to II then that means you will have a ISA or a GIA or both. You probably can't get tax relief on the ISA/GIA element. If you had only the SIPP at £11.99 then you can pay that from SIPP interest or income making it free of tax.

cloud_dog

I always arrange it so that the pension fees are taken from the SIPP, as that means it only costs me 80% of the charge 🫣

jimjames

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

segovia

jimjames said:

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

It's strange because I don't get tax relief on my charges with Interactive Investor

segovia

Scrudgy said:

If you are paying £21.99 to II then that means you will have a ISA or a GIA or both. You probably can't get tax relief on the ISA/GIA element. If you had only the SIPP at £11.99 then you can pay that from SIPP interest or income making it free of tax.

Good point, I'll check it out. Maybe if the charges were split the SIPP element would be eligible for tax relief.

Linton

segovia said:

jimjames said:

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

It's strange because I don't get tax relief on my charges with Interactive Investor

II take charges out of the investment account (as do all other platforms I have used).  So any cash paid into a pension including tax relief can be used.

Though it doesnt do you much good as it means less money for investments.

segovia

Linton said:

segovia said:

jimjames said:

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

It's strange because I don't get tax relief on my charges with Interactive Investor

II take charges out of the investment account (as do all other platforms I have used).  So any cash paid into a pension including tax relief can be used.

I'll pick it up with II I've paid to date 1583.00 50% is SIPP,  I wonder if they would do a restrospective tax credit

Albermarle

segovia said:

jimjames said:

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

It's strange because I don't get tax relief on my charges with Interactive Investor

With my Fidelity account. They first try and take the monthly charge from my 'cash management account' which is a separate account. They remind me each month to top it up as there is zero in it.
I do nothing and they organise a transfer from my SIPP to this account to pay the charge, so it only costs me 80% of the charge effectively.
I tried once to move the money from my SIPP myself but to do this I had to start the formal drawdown process, so cancelled it.
Apparently in the past it was not allowed to pay charges from tax relieved money, but now it seems to be.

jimjames

segovia said:

jimjames said:

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

It's strange because I don't get tax relief on my charges with Interactive Investor

If I pay my Vanguard SIPP charges from outside the SIPP or by DD I don't get tax relief. I choose to pay from inside the SIPP as it saves me money

Linton said:

segovia said:

jimjames said:

segovia said:

I also pay £21.99 flat fee to II every month to cover my account charges, I do not get tax relief on the £21.99 I pay to II.

II are cheaper than my AJ Bell and if I consolidate I'll probably stick with II, however I thought it worth a mention. It seems very strange to get tax relief on payments to cover account charges.

Not sure why it's strange to get tax relief on charges. If it's taken from inside the account then it will be from money that by its nature has been given tax relief. I'm with ii and am intended the fees to come from the SIPP so it's costing me less. Why pay 100% of the fees when you only need to pay 60% or 80%?

It's strange because I don't get tax relief on my charges with Interactive Investor

Though it doesnt do you much good as it means less money for investments.

I don't think that's the case unless you are paying 100% of your earning into your pension. If not then just increase contributions to cover the cost of the charges and it will still be cheaper.