SIPP drawdown

tribetown

I am over 55 years of age and would like to take a 25% tax free lump sum from my SIPP.

My SIPP consists of 3 different US shares and a small amount of cash (£150) that I leave in there to cover fees.

Am I able to decide which shares are sold to raise the 25%, can I sell some of each?
Can I specify to leave the current cash in the SIPP?

Hoenir

Who is your SIPP with. 

DRS1

Surely you can just sell whatever you like? It is YOUR SIPP.

Probably best to sell first and then ask for the TFLS.

tribetown

Hoenir said:

Who is your SIPP with. 

It is with ii.

tribetown

DRS1 said:

Surely you can just sell whatever you like? It is YOUR SIPP.

Probably best to sell first and then ask for the TFLS.

Not sure so thought I would ask. If so, yes I can sell what I like to the value of 25% of the SIPP and withdraw the cash raised from selling the shares.

dunstonh

tribetown said:

I am over 55 years of age and would like to take a 25% tax free lump sum from my SIPP.

My SIPP consists of 3 different US shares and a small amount of cash (£150) that I leave in there to cover fees.

Am I able to decide which shares are sold to raise the 25%, can I sell some of each?
Can I specify to leave the current cash in the SIPP?

That is one of the features of a SIPP.  You decide the sales/purchases etc.  Indeed, many platforms require you to do the sales to make the cash available.

singhini

tribetown said:

DRS1 said:

Surely you can just sell whatever you like? It is YOUR SIPP.

Probably best to sell first and then ask for the TFLS.

Not sure so thought I would ask. If so, yes I can sell what I like to the value of 25% of the SIPP and withdraw the cash raised from selling the shares.

Can i check something please.
Lets say your SIPP is worth £10,000 and therefore selling shares worth 25% would = £2,500

Are you expecting to:

.A.) get the £2,500 all tax free in your back pocket
or
.B.) get 25% of the £2,500 tax free i.e. £625 and then pay tax on the remaining £1,875


My gut feeling is your probably expecting scenario A, however you might actually experience scenario B

My point is be careful how you go about taking money from a pension tax free and the reality of what you actually get. 

tribetown

dunstonh said:

tribetown said:

I am over 55 years of age and would like to take a 25% tax free lump sum from my SIPP.

My SIPP consists of 3 different US shares and a small amount of cash (£150) that I leave in there to cover fees.

Am I able to decide which shares are sold to raise the 25%, can I sell some of each?
Can I specify to leave the current cash in the SIPP?

That is one of the features of a SIPP.  You decide the sales/purchases etc.  Indeed, many platforms require you to do the sales to make the cash available.

I see, thank-you.
At what point after I ask my SIPP provider, do they determine how much my SIPP is worth to work out the 25% I can withdraw tax free?
If I were to sell the shares I want to raise the cash and ask ii if I can withdraw 25%, do they take to total portfolio value at that moment in time?

tribetown

singhini said:

tribetown said:

DRS1 said:

Surely you can just sell whatever you like? It is YOUR SIPP.

Probably best to sell first and then ask for the TFLS.

Not sure so thought I would ask. If so, yes I can sell what I like to the value of 25% of the SIPP and withdraw the cash raised from selling the shares.

Can i check something please.
Lets say your SIPP is worth £10,000 and therefore selling shares worth 25% would = £2,500

Are you expecting to:

.A.) get the £2,500 all tax free in your back pocket
or
.B.) get 25% of the £2,500 tax free i.e. £625 and then pay tax on the remaining £1,875


My gut feeling is your probably expecting scenario A, however you might actually experience scenario B

My point is be careful how you go about taking money from a pension tax free and the reality of what you actually get. 

I was expecting A)

"SIPP drawdown allows you to access your pension savings flexibly, taking up to 25% tax-free as a lump sum while keeping the rest invested and drawing income from it"

Have I misunderstood the process?

NoMore

Pension Options at Retirement | Income Options - ii

You can do either (or a combination) of A and B, I think singhini was pointing out to make sure you choose the option you want.

QrizB

tribetown said:

Have I misunderstood the process?

No, you're correct.