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Anyone with an AJ Bell SIPP and Drawdown?
Comments
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Albermarle said:RecliningInPeace said:I have been in touch with AJ Bell with similar questions and yes, the percentages are applied to the overall pot, not individual shares or funds. You cannot choose to crystallise only specific shares or funds.In terms of your fear, the problem is minimised as long as the crystallised proportion is not too large, and the particular share does not constitute too large a proportion of your overall holdings, because the growth lifts both sides (crystallised and uncrystallised).Here is a worked example. I hope that helps.
I appreciate the ‘warnings’ about the size of the crystallised portion v the uncrystallised and how that could interact with a large increase in just one share price. I guess we all live in hope, though.
At the time of setting up my SIPP and investing in several AIM companies, it was on the understanding that i could leave anything in my pension accounts to my children and grandchildren, free of IHT. But we all now know what takes effect from April 2027 and how the carefully laid plans of thousands are likely to be affected.
If I had my time over again, I’d have gone the ISA route with the same investments.
Anyway, I digress. I’m going to run a few figures using my actual SIPP and drawdown balances and assume that just one of my small company shares comes up trumps. I’ll then decide what to do in terms of transferring or staying put.
Thanks again.
As from 2027 , ISA and SIPP money will be treated the same for IHT purposes.
So you might end up paying more IHT with the SIPP but overall you would still be ahead.
Although I accept the point about ISAs and SIPPs receiving the same IHT treatment from April 2027, I understood there to be a further (potential) issue in that if the owner/holder dies at age over 75, then the SIPP/Drawdown monies are not only caught under the IHT regime, but beneficiaries (excluding spouse) have to pay Income tax at their marginal rate?
I guess it’s all largely academic because not one of us knows what’s going to happen next.
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You choose what to sell in order to have tax free cash or drawdown, so in effect you are leaving your fastest growing investments uncrystallised unless you decide to sell them.
My Charles Stanley Sipp is part crystallised and they use notional split rather than separate pots, I have a few years of income ready in a short term money market fund so that’s obviously what I’ll sell when I come to take an income, it will take 3 years to become fully crystallised, by which point I will be fully in equities.Notional split is irrelevant really but it is annoying when you can’t ‘see’ it.1 -
SVaz said:You choose what to sell in order to have tax free cash or drawdown, so in effect you are leaving your fastest growing investments uncrystallised unless you decide to sell them.
My Charles Stanley Sipp is part crystallised and they use notional split rather than separate pots, I have a few years of income ready in a short term money market fund so that’s obviously what I’ll sell when I come to take an income, it will take 3 years to become fully crystallised, by which point I will be fully in equities.Notional split is irrelevant really but it is annoying when you can’t ‘see’ it.
At the end of the day, I think my decision is going to be based on 2 things;
1) can I tolerate the thought of having just one SIPP, which uses notional splits or am I too wedded to the HL way of doing things?
2) can I structure my investments so that I refrain from regular small amount lump sums into OIECs, which are ‘free’ of charge with HL but not AJB?
If I can get a yes to both of the above, then it leaves the way clear to me transferring - the immediate benefit being a reduction in my platform fee from 0.45% to 0.25% and a reduction in my share/ETF/Investment Trust share dealing costs from £11.95 a pop to £5.
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Don't know if it has been said before, but apparently HL charge separately for the crystallised and uncrystallised pots, as well as showing them separately.
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LHW99 said:Don't know if it has been said before, but apparently HL charge separately for the crystallised and uncrystallised pots, as well as showing them separately.
I also have absolutely no idea why the ‘capped’ charge for shares/ETFs/Investment Trusts is so much higher for a pension account than it is for a stocks and shares ISA.0 -
That’s no different to charging for one pot, it’s not going to cost any more, unless you have very large amounts which, when split, fall into the sub £250k tier, most peoples’ Sipps are nowhere near that big.Once it’s all crystallised it’s irrelevant anyway.1
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@thingswerentthisbadinmyday an update on this. AJ Bell has come back to me on my scenario (which I had done on the back of their answer to me) and turns out I got it slightly wrong. The proportion being crystallised is calculated before TFC is paid out, not after. So in my earlier example, it is not 3.8% that is crystallised, but 5%. Here is an updated (and hopefully a bit neater) example, with a couple of scenarios.
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RecliningInPeace said:@thingswerentthisbadinmyday an update on this. AJ Bell has come back to me on my scenario (which I had done on the back of their answer to me) and turns out I got it slightly wrong. The proportion being crystallised is calculated before TFC is paid out, not after. So in my earlier example, it is not 3.8% that is crystallised, but 5%. Here is an updated (and hopefully a bit neater) example, with a couple of scenarios.
I’m starting to think that the AJB way of doing things might not be the obstacle (for me) I thought it might be.
Also - and I know I’m not going to be able to explain this properly - but by having one pot, it will have the effect of bringing those shares which are currently sitting in a totally crystallised account at HL, back into play. I’m not sure if that description makes sense to anyone apart from me!!
Thanks again.1 -
SVaz said:That’s no different to charging for one pot, it’s not going to cost any more, unless you have very large amounts which, when split, fall into the sub £250k tier, most peoples’ Sipps are nowhere near that big.Once it’s all crystallised it’s irrelevant anyway.
However the cap applies per pot, so if you have two pots you pay twice1 -
LHW99 said:Don't know if it has been said before, but apparently HL charge separately for the crystallised and uncrystallised pots, as well as showing them separately.
I also have absolutely no idea why the ‘capped’ charge for shares/ETFs/Investment Trusts is so much higher for a pension account than it is for a stocks and shares ISA.0
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