Is it still worth contributing to SIPP?

Ciprico

Maybe consider IHT, after 2027 money in surviving spouse's SIPP (so including deceased partners) will be taxed at 40% on second spouse death, then at the benficiary's normal tax rate, so possibly 40% again. 

I wish I'd put less in my SIPP, since the pension/IHT reform.

I would say don't "get" more in SIPP than you're likely to spend yourself....

Tom6565

ali_bear said:

Given the not-altogether-unlikely event of Reform getting into power, with a former stockbroker at the helm, it remains a possibility that the TFLS limit could be scrapped within the next decade. Just saying. 

yes always a chance!

Marcon

Tom6565 said:

Marcon said:

Tom6565 said:

I am in a quandary, I am 60, looking to retire soon. I have a DB pension starting soon worth about £15k a year and a SIPP of about £800k. I have money in my own business and have a choice as to whether to put that into my SIPP or just leave it there to draw down on in dividends as and when, but it will get no growth. 

Why won't it get any growth? If it's your own business then, as a director, you have a responsibility to act in the best interests of the business...which in this case would tally nicely with your own best interests!

Tom6565 said:

Triumph13 said:

thank you yes that's what I'm thinking, the only tax relief I get is that I dont pay 25% Corporation tax on that contribution as it reduces company profits, so I'm gaining 25% to lose 40% later. I guess I will get growth on that amount in a SIPP, say 10% a year versus nothing if it just sits there in the company. thats the only other consideration, so that might help pay the tax, but I'm still not much better off.  

If you are paying CT at 25%, then you are making profits of at least £250,000 - so why would you leave those funds sitting doing nothing, and not making any sort of investment return? Your Mem&Arts are likely to give you the directors very broad investment powers - maybe now is the time to ensure you are making good use of those powers?

It's not my own business and I'm not a Director. I dont really want to get into all that here, just assume its a pot of money sat there doing not a lot.

You have money 'in your own business' but are now saying it's not your own business...very hard to answer helpfully.

Tom6565

Marcon said:

Tom6565 said:

Marcon said:

Tom6565 said:

I am in a quandary, I am 60, looking to retire soon. I have a DB pension starting soon worth about £15k a year and a SIPP of about £800k. I have money in my own business and have a choice as to whether to put that into my SIPP or just leave it there to draw down on in dividends as and when, but it will get no growth. 

Why won't it get any growth? If it's your own business then, as a director, you have a responsibility to act in the best interests of the business...which in this case would tally nicely with your own best interests!

Tom6565 said:

Triumph13 said:

thank you yes that's what I'm thinking, the only tax relief I get is that I dont pay 25% Corporation tax on that contribution as it reduces company profits, so I'm gaining 25% to lose 40% later. I guess I will get growth on that amount in a SIPP, say 10% a year versus nothing if it just sits there in the company. thats the only other consideration, so that might help pay the tax, but I'm still not much better off.  

If you are paying CT at 25%, then you are making profits of at least £250,000 - so why would you leave those funds sitting doing nothing, and not making any sort of investment return? Your Mem&Arts are likely to give you the directors very broad investment powers - maybe now is the time to ensure you are making good use of those powers?

It's not my own business and I'm not a Director. I dont really want to get into all that here, just assume its a pot of money sat there doing not a lot.

You have money 'in your own business' but are now saying it's not your own business...very hard to answer helpfully.

OK that might have misled you I apologise, "my own business" does not mean I am a director. I'm new here and was hoping for kind words and guidance, but I shan't post again, so you wont have to waste any more time on my lack of clarity. Thanks to all who took the time and sorry.

Marcon

Tom6565 said:

Marcon said:

Tom6565 said:

Marcon said:

Tom6565 said:

I am in a quandary, I am 60, looking to retire soon. I have a DB pension starting soon worth about £15k a year and a SIPP of about £800k. I have money in my own business and have a choice as to whether to put that into my SIPP or just leave it there to draw down on in dividends as and when, but it will get no growth. 

Why won't it get any growth? If it's your own business then, as a director, you have a responsibility to act in the best interests of the business...which in this case would tally nicely with your own best interests!

Tom6565 said:

Triumph13 said:

thank you yes that's what I'm thinking, the only tax relief I get is that I dont pay 25% Corporation tax on that contribution as it reduces company profits, so I'm gaining 25% to lose 40% later. I guess I will get growth on that amount in a SIPP, say 10% a year versus nothing if it just sits there in the company. thats the only other consideration, so that might help pay the tax, but I'm still not much better off.  

If you are paying CT at 25%, then you are making profits of at least £250,000 - so why would you leave those funds sitting doing nothing, and not making any sort of investment return? Your Mem&Arts are likely to give you the directors very broad investment powers - maybe now is the time to ensure you are making good use of those powers?

It's not my own business and I'm not a Director. I dont really want to get into all that here, just assume its a pot of money sat there doing not a lot.

You have money 'in your own business' but are now saying it's not your own business...very hard to answer helpfully.

OK that might have misled you I apologise, "my own business" does not mean I am a director. I'm new here and was hoping for kind words and guidance, but I shan't post again, so you wont have to waste any more time on my lack of clarity. Thanks to all who took the time and sorry.

It isn't so much time wasting, but rather the danger is that you will get answers based on incorrect 'information' - and act on it to your detriment.

Have a look at small pots as I suggested previously - that'll get you up to another £7,500 in tax free cash on top of the LSA: https://www.litrg.org.uk/pensions/pension-withdrawals/small-pensions

You might also consider some professional advice, given the amounts of cash you have overall.

waveneygnome

Sorry OP you feel unwlecome/have indicated you won't come back. 

There are lots of really good people on these boards, who can give inciteful information/alternate points of view that can help decision making.

The issue is, what do you do with money if you don't contribute company funds (profits) into a Sipp?

£10k into Sipp from Co:  no CT tax/income/NI on contribution = £2500 tax free and £7500 taxed at marginal rate, could be 40%

£10k left inside Co:  taxed at 25%...and still in the Co......take out as Dividends...taxed at marginal rate (?)....you could be left with a lot less than option 1.

I'm no expert though.....just thinking along the same lines as you!

german_keeper

waveneygnome said:

 

There are lots of really good people on these boards, who can give inciteful information/alternate points of view that can help decision making.

I think you probably mean insightful, at least I hope you do.

waveneygnome

You're right.........insightful.......although I've just looked up the proper definition of my original post.....and there's plenty of that on here too!

Tom6565

waveneygnome said:

You're right.........insightful.......although I've just looked up the proper definition of my original post.....and there's plenty of that on here too!

Yes I'd agree from my brief experience. Seems a pretty unforgiving place. I'll be off, enjoy.

MeteredOut

Tom6565 said:

waveneygnome said:

You're right.........insightful.......although I've just looked up the proper definition of my original post.....and there's plenty of that on here too!

Yes I'd agree from my brief experience. Seems a pretty unforgiving place. I'll be off, enjoy.

The only time I've found these boards unforgiving is when people don't hear the answers the want to hear and start illogical arguments against what's they're being told.