CGT bands

TBC15

Does the 25% tax free cash taken from a SIPP count towards the threshold for 18% / 24% CGT bands?

ColdIron

No it doesn't

It's literally tax free and you don't need to (and should not) report it to HMRC

talexuser

There's no CGT on a SIPP, you take income and pay whatever income tax that is applicable.

EthicsGradient

TBC15 said:

Does the 25% tax free cash taken from a SIPP count towards the threshold for 18% / 24% CGT bands?

No - 'tax free' is tax free - it grew (hopefully) inside the SIPP tax-free, and the 25% is what you can withdraw tax-free - it doesn't count towards anything else, and once it's out, it's your cash.

NorthYorkie

EthicsGradient said:

TBC15 said:

Does the 25% tax free cash taken from a SIPP count towards the threshold for 18% / 24% CGT bands?

No - 'tax free' is tax free - it grew (hopefully) inside the SIPP tax-free, and the 25% is what you can withdraw tax-free - it doesn't count towards anything else, and once it's out, it's your cash.

Except, if you've still got it when you die, it might be liable to Inheritance Tax!

TBC15

talexuser said:

There's no CGT on a SIPP, you take income and pay whatever income tax that is applicable.

It’s my understanding that SIPP income counts as income and narrows the available 18% band for CGT. From the many responses I understand the 25% tax free bit doesn’t.

Dazed_and_C0nfused

TBC15 said:

talexuser said:

There's no CGT on a SIPP, you take income and pay whatever income tax that is applicable.

It’s my understanding that SIPP income counts as income and narrows the available 18% band for CGT. From the many responses I understand the 25% tax free bit doesn’t.

If it uses your basic rate band that would be correct.

But someone taking say £12,570 with no other income and having not applied for Marriage Allowance wouldn't have used any of their basic rate band.

TBC15

Dazed_and_C0nfused said:

TBC15 said:

talexuser said:

There's no CGT on a SIPP, you take income and pay whatever income tax that is applicable.

It’s my understanding that SIPP income counts as income and narrows the available 18% band for CGT. From the many responses I understand the 25% tax free bit doesn’t.

If it uses your basic rate band that would be correct.

But someone taking say £12,570 with no other income and having not applied for Marriage Allowance wouldn't have used any of their basic rate band.

The sums would be the same surely?