Is This A tax Loophole??

masonic

If the plan is to remove it during the next tax year, then a short-term money market fund would be about the only sensible option.

NorthernGeezer_2

She don't need the money, the thought of cashing but giving the government 20% of it sticks in the throat, the plan is to invest it and leave it to the ankle biters,

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81968391#Comment_81968391

So does she anticipate using her full personal allowance each tax year without drawing this £8K down?

Also, unless she's already used up all of her tax-free lump sum, 25% of the SIPP money will be tax-free on withdrawal, so the net taxation is 15% for anything beyond her personal allowance…

NorthernGeezer_2

It wasn't a big pot to start with, she took her 25% tax free amount straight away and withdrew on an annual basis an amount that took her to the tax threshold, she's now hit the point where tax will need to be paid on any withdrawals, hence the need to invest it.

masonic

If there's no opportunity to withdraw in future years using the personal allowance, and the money isn't needed, then it would be feasible to invest it in some low cost multi-asset fund or global tracker and more or less forget about it.

NorthernGeezer_2

I myself invest in 2 low cost multi asset funds which have soared since I took them 3 years ago, the downside of this of course is the cost to purchase has risen too, so whilst I'm happy with mine, should I be looking at something on the down slope which looks like it might be on the up??

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81968527#Comment_81968527

If you can find something like that then go ahead, although if it was that easy then everyone would be doing it, but it requires more knowledge than the market has about which companies/sectors/markets are undervalued. In the absence of such knowledge, sticking with well-diversified investments is likely to be more productive…

masonic

There's no way of predicting what might do well over the next few years. You could try investing in things that have not done so well in the past, such as value stocks or smaller companies, but it's anybody's guess how they will perform vs the total market. Over the long term, the precise start point will make a diminishing difference to the final outcome.

NorthernGeezer_2

I purchased my HSBC shares 3 years ago at 197, todays price is 239 and I'm aware its not my money I'm playing with, my gains have been 19% and the pessimist in me is expecting them to fall 😕

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81968527#Comment_81968527

https://forums.moneysavingexpert.com/discussion/comment/81968556#Comment_81968556

When you refer to "HSBC shares", do you literally mean shares in HSBC plc or are you talking about HSBC-managed multi-asset funds?