SIPP Management / Transfer ISA

mb6000 · 16 May 2019 at 10:02AM

Hi - if anyone could help with this that would be great.

*I am self-employed with no work pension, so I have to do my own, age 42, saving for retirement at 50/55

I have a few investments in different places and wondered if I can combine it all together into one SIPP:\

1) Vanguard ISA - currently pay in 1000 / month and buy the 80% Life Strategy Fund, current value around 30k

2) I recently opened a ii SIPP, so I can claim the 720 / year tax credit, I pay in 1000 / month into this account. I have bought some more of the Vanguard 80% Life Strategy Fund, and one other fund that is similar, current value 7k.

3) I have some shares in a UK company, that are held in trust somewhere else.

Q. Should I move my Vanguard ISA investments into my SIPP? So it's all together considering I am investing in the same fund with the same amount each month? Do this mean less charges and any tax advantages?

Q. Should I move my shares into my SIPP? Can you do this?

Q. Are there any other tax credits I qualify for apart from the 720 / year?

Q. Can you have more than one ISA?

Thanks!

System · 16 May 2019 at 2:50PM

mb6000 wrote: »

Q. Should I move my Vanguard ISA investments into my SIPP? So it's all together considering I am investing in the same fund with the same amount each month? Do this mean less charges and any tax advantages?

Are you likely to need the money in the future before you hit retirement age? If so then no because anything in a SIPP is inaccessible until you're 55 years old.

Albermarle · 16 May 2019 at 2:56PM

Whilst it is possible to move shares and funds from one SIPP to another , I would think that anything going into a SIPP from another source would be seen as a new contribution to the SIPP , so would have to go in as cash and you would get tax relief on that ( if you were entitled to it).
Just my first thought and am not 100% sure .

mb6000 · 16 May 2019 at 8:30PM

I might need it before 55, not sure, so will keep it in its own separate ISA - thanks

AnotherJoe · 16 May 2019 at 9:12PM

mb6000 wrote: »

Hi - if anyone could help with this that would be great.

*I am self-employed with no work pension, so I have to do my own, age 42, saving for retirement at 50/55

I have a few investments in different places and wondered if I can combine it all together into one SIPP:\

1) Vanguard ISA - currently pay in 1000 / month and buy the 80% Life Strategy Fund, current value around 30k

2) I recently opened a ii SIPP, so I can claim the 720 / year tax credit, I pay in 1000 / month into this account. I have bought some more of the Vanguard 80% Life Strategy Fund, and one other fund that is similar, current value 7k.
That's confusing. If you have no earnings you can claim £720 on top of £2880. But £1000/month is considerably more than £2880. How much are you earning?
3) I have some shares in a UK company, that are held in trust somewhere else.

Q. Should I move my Vanguard ISA investments into my SIPP? So it's all together considering I am investing in the same fund with the same amount each month? Do this mean less charges and any tax advantages?
You can't just arbitrarily pay money into a SIPP. The fact it comes from an ISA doesn't matter. You need to have sufficient earnings.

Q. Should I move my shares into my SIPP? Can you do this?
Yes, again depending on your earnings, plus in your cse the SIPP rules and the trust.

Q. Are there any other tax credits I qualify for apart from the 720 / year?
You don't appear to have understood SIPPs. You can claim "tax credits" on everything you pay iin, subject to various rules. Do you have an accountant Or IFA?

Q. Can you have more than one ISA?
Why would you want more than one?
Thanks!

I think you need to do more reading on SIPPs. Or talk to your accountant or IFA.

mb6000 · 16 May 2019 at 9:59PM

Hi Joe, I should have clarified, the bulk of my earnings are not taxed (I work offshore so there are allowable expenses), so although I am a high earner and can contribute a relatively large amount each month, for tax purposes I am at the basic rate.

AnotherJoe · 16 May 2019 at 10:06PM

If you pay more than you are eligible to pay into a SIPP there will be a big tax mess.
When you say you pay tax "at basic rate" what does that mean? You could be earning £13k or £45k. Or are you earning less than the personal tax allowance ? And if so how much ? Do you pay any Tax?

bowlhead99 · 16 May 2019 at 10:24PM

mb6000 wrote: »

Hi Joe, I should have clarified, the bulk of my earnings are not taxed (I work offshore so there are allowable expenses), so although I am a high earner and can contribute a relatively large amount each month, for tax purposes I am at the basic rate.

The £720 a year you mentioned earlier - as a gross up for basic rate tax - implies you are contributing £2880 a year and getting it grossed up by the basic rate tax on £3600 of income a year.

If you have £3600 or less of taxable income per year, you can contribute up to £2880 and still be given a £720 gross-up by the pension provider. You could make that £2880 contribution and get the £720 even if you didn't earn as much as £3600.

However, if you are contributing £1000 per month (£12000 a year) into the pension, you would get a £3000 gross up for basic rate tax (to make it £15000 gross inside the pension), and £720 doesn't come into it. But you would need to have qualifying earnings of £15k+, because your contribution limit is set by your earnings

And if you are going to put more than £1000 in per month/£12000 year (because for example you have existing ISA money that you also want to move into the pension on top of the £12000 a year) you are going to need to have taxable income of considerably more than £15000, and the £720 figure is definitely irrelevant.

mb6000 · 17 May 2019 at 9:14AM

Thanks for the clarification - I think the issue here is the advice I have been given from an IFA. My situation is not that common and it's hard to find an IFA who understands. I was advised to open a SIPP in order to benefit from the 720 top up from on the small contribution.

However, I did not realize there was a cap on what I could put into a SIPP, in regards to my taxable income, I thought you could just pay whatever you wanted to into it.

For clarity my taxable income at the moment I think is around 27k, which is all rental property income, 20k from overseas (EU so also taxed in EU and then in UK if applicable, and 7k from the UK), makes up the total taxable income. However my earnings, which are not taxed, are considerably higher than this.

My goals are to invest for retirement and I was told a pension was a tax efficient way to do this.

So with this in mind is a SIPP still the way to go? And if so, how do I work out any (if any) limits to what I can contribute per year?

AnotherJoe · 17 May 2019 at 9:34AM

Your maximum contribution you can put I into a SIPP is 80% of your taxable earnings.its not clear to me from what you wrote if the full 27k is taxable in the U.K. if you put 27k on your self assesment then it will be.
You absolutely do not want to be putting more into a SIPP than allowed for two reasons
1. It's not legal ! You'll get money added to it which you aren't entitled to which when discovered will be a god awful mess to sort out.
2. When you take money out of a SIPP it's taxable, unlike an ISA. So worst case you'd earn money that's not taxable pay it into a SIPP and after the tax mess is sorted get taxed at anywhere from 15% to 35% when you take it out !

jaybeetoo · 17 May 2019 at 12:30PM

You can usually access money from your personal pensions when you reach 55 BUT this will increase to 57 by 2028.

SIPP Management / Transfer ISA

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