New SIPP with HL to create 3x Small Pots

FIREDreamer

kinger101 said:

Think HMRC may deliberately close this "loophole" at some point, but creating a series of transactions solely for tax benefit in this manner would very likely be fall foul of general anti-avoidance rules.

As well as potentially failing, you will also potentially invite HMRC to issue a formal enquiry. Which could cost you more if you need to hire an accountant to help you with


This to be sounds like poking a wasps nest and finding it doesn't contain honey.

Hargreaves have allowed this for years. I think their compliance department would shut this down if it was illegal, albeit arguably it’s not in the spirit of the legislation. Maximum gain is only tax saved on 3 lots of £2,500 which even for a 45% taxpayer is under £4,000.

kinger101

FIREDreamer said:

kinger101 said:

Think HMRC may deliberately close this "loophole" at some point, but creating a series of transactions solely for tax benefit in this manner would very likely be fall foul of general anti-avoidance rules.

As well as potentially failing, you will also potentially invite HMRC to issue a formal enquiry. Which could cost you more if you need to hire an accountant to help you with


This to be sounds like poking a wasps nest and finding it doesn't contain honey.

Hargreaves have allowed this for years. I think their compliance department would shut this down if it was illegal, albeit arguably it’s not in the spirit of the legislation. Maximum gain is only tax saved on 3 lots of £2,500 which even for a 45% taxpayer is under £4,000.

HL have no legal obligation here to ensure their customers don't set up contrived schemes. HL let me do it wouldn't look clever if HMRC challenged.  Anymore that saying but the car can go faster than the speed limit.

ali_bear

First one took a few weeks to go through, the second one was within the week. They applied a BR tax to the taxable part each time - despite HMRC giving them a perfectly good tax code. 

FIREDreamer

ali_bear said:

First one took a few weeks to go through, the second one was within the week. They applied a BR tax to the taxable part each time - despite HMRC giving them a perfectly good tax code. 

BR is always used for small pots regardless of actual tax code. Any tax overpayment or underpayment is sorted out with HMRC.

ali_bear

Thanks - I thought that was probably the case. I can wait for the refund