Sipp beneficiary

dunstonh

Is it not possible for the SIPP just to be redesignated to the beneficiary? If not I presume the SIPP provider could just do some kind of internal transfer to a new SIPP, if the OP requested it?

It requires a new product and some providers do not offer beneficiary drawdown (mainly the closed book providers or smaller players).  Remember that beneficiary drawdown is neither crystallised nor uncrystallised.  It has a third classification, and providers have to support that classification.  Not all do.  Much in the same way many providers don't support disqualifying pension credit (a 4th classification)

It's with aj bell. I'm only 43, and yes i would want to leave the majority saved just taking smaller amounts. Cant find any information on being able to do this though. Everything I see is from age 55

You shouldn't be looking at the options relevant to uncrystallised pensions as that isn't what this is.    This is a beneficiary drawdown (providers may have their own marketing name for beneficiary drawdown).

Albermarle

sheramber said:

I don’t know if it is different but I inherited my husband’s SIPP. He was under 75 so it is non taxable. I was over pension age.

I decided to transfer it to a SIPP  and was advised to consult a financial advisor.

I could invest with the same pension company or transfer to any other I chose.

The adviser I consulted recommended I stay with the same pension company.

They term it a bereavement pension. 

When dealing with pension providers, they will regularly advise you to talk to a financial advisor, but usually it is not a necessity, except in certain circumstances. Although of course you may choose to.

They do this partly to cover themselves in case of later issues ' well we did advise to see a financial advisor' 

toomuchinfo

I inherited my husband’s SIPP earlier this year, he was under 75 so it was non taxable. It was with AJBell who sent me a form with my options. I decided to transfer it to my own AJ Bell SIPP. It is in a ring fenced separate pot within my SIPP.

It was handled very efficiently and sensitively.

DRS1

toomuchinfo said:

I inherited my husband’s SIPP earlier this year, he was under 75 so it was non taxable. It was with AJBell who sent me a form with my options. I decided to transfer it to my own AJ Bell SIPP. It is in a ring fenced separate pot within my SIPP.

It was handled very efficiently and sensitively.

That is interesting.  Since the OP  is also with AJBell maybe they can see if they can get the same thing (presumably using the first option in the letter they got).

Are there any particular restrictions on the ringfenced part?  No 25% TFLS obviously but presumable there is some note saying how withdrawals will be taxed (or not in your case).

toomuchinfo

DRS1 said:

toomuchinfo said:

I inherited my husband’s SIPP earlier this year, he was under 75 so it was non taxable. It was with AJBell who sent me a form with my options. I decided to transfer it to my own AJ Bell SIPP. It is in a ring fenced separate pot within my SIPP.

It was handled very efficiently and sensitively.

That is interesting.  Since the OP  is also with AJBell maybe they can see if they can get the same thing (presumably using the first option in the letter they got).

Are there any particular restrictions on the ringfenced part?  No 25% TFLS obviously but presumable there is some note saying how withdrawals will be taxed (or not in your case).

There are no restrictions on the ringfenced part and I can withdraw whenever I like tax free. It shows up in a separate pot and as it’s still invested it changes accordingly.

Albermarle

DRS1 said:

toomuchinfo said:

I inherited my husband’s SIPP earlier this year, he was under 75 so it was non taxable. It was with AJBell who sent me a form with my options. I decided to transfer it to my own AJ Bell SIPP. It is in a ring fenced separate pot within my SIPP.

It was handled very efficiently and sensitively.

That is interesting.  Since the OP  is also with AJBell maybe they can see if they can get the same thing (presumably using the first option in the letter they got).

Are there any particular restrictions on the ringfenced part?  No 25% TFLS obviously but presumable there is some note saying how withdrawals will be taxed (or not in your case).

I suspect that when offering the three options.

1 - Transfer to a pension of your choice
2 - Transfer to buy an annuity
3 - Draw the lump sum in full.

That AJ Bell are not allowed to say with Option 1 ' We can sort that out for you' although that would be the simplest and probably the best option.

run_rabbit55

So spoke to aj bell and can have the full 107k placed in my own flexi access account. I want to take out small amounts over time but staying within my 20% tax band. They have confirmed they will place a 40% tax charge on withdrawal which I presume I can claim back straight away from hmrc? Will every future withdrawal be the same? Or will they get my tax code at some point? 

DRS1

I thought you would be charged income tax at your marginal rate.  Are you a 40% tax payer?

Albermarle

DRS1 said:

I thought you would be charged income tax at your marginal rate.  Are you a 40% tax payer?

It depends on the pattern of withdrawals.
If you take a £5K lump sum in April for example, the tax system works on the basis that you will be taking £5K every month, and taxes you as if you have an income of £60K pa, so at 40%.
You just have to claim back the overpaid tax, if you are actually a 20% taxpayer.

dunstonh

run_rabbit55 said:

So spoke to aj bell and can have the full 107k placed in my own flexi access account. I want to take out small amounts over time but staying within my 20% tax band. They have confirmed they will place a 40% tax charge on withdrawal which I presume I can claim back straight away from hmrc? Will every future withdrawal be the same? Or will they get my tax code at some point? 

Pension draws are made using PAYE.    Month 1 tax code would be applied to the first wtidhrawal (often known as emergency tax) but HMRC will notify the platform of the tax code to use with later withdrawals.

The extra tax taken in month 1 would be collected/refunded over the remainder of the tax year to end up with the correct amount in the final payroll month.    That is unless your first payment is in March (month 12), where it will then require communication with HMRC.