SIPP drawdown

tribetown

michaels 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?

I'm sure you are aware but having your pension invested in only a few assets in a single market may leave you exposed to considerable volatility even to the point where your 25% cash is no longer 25% when the pcls calculation is made.

michaels 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?

I'm sure you are aware but having your pension invested in only a few assets in a single market may leave you exposed to considerable volatility even to the point where your 25% cash is no longer 25% when the pcls calculation is made.

Yes, thank-you for reminding me.

tribetown

Albermarle said:

tribetown said:

Thank-you for your detailed reply, I appreciate it.

Yes, I understand that further lump sums could be taxable. I plan to keep any further lump sums for when I am not working and below £12,570. 

Just to be clear, if you take a taxable lump sum of £12570, then tax will be taken off it ( maybe quite a lot) even if it is your only income. You can claim this back though.
The issue is that when you take a lump sum one month, the tax system assumes you will then get that amount every month and taxes you accordingly.
If you spread the £12570 income over 12 separate months, then you should not have to pay any tax or claim it back. 

I had no idea about this so thanks for letting me know.
Dividing the £12,570 into 12 separate monthly withdrawals maybe the way to go.