Taking first UFPLS from a small Hargreaves Lansdown SIPP

Nationwide8 · 25 March 2017 at 9:09PM

All interesting ^^^ bowlhead,Thank you.

As its the first time I've taken any money out of the SIPP it's just learning the process,as I have to wait for the forms,fill them in,send them off its obviously very very tight for any taxable withdrawal going through for this tax year.
Do have a significant part of my PA for 2016-2017 unused so it's a shame to "loose" it,but I was late investing in 2017 ( beginning of Jan )

I'd rather not have to claim tax back just as its simpler but I'll have a look when it happens,I suppose you could just wait for HMRC to realise they have overcharged you in your yearly tax document "thing" and then claim it ??? ( but it's obs very delayed then )

I did the risk assess questions this morning ( and apparently that "lasts" 6 mths so if you withdraw again in that time you don't have to do it again ) on the phone so hopefully just will get the withdrawal forms mid week.

Silly question

.... but when you claim the tax back I will probably be claiming it back for 17-18 tax year as my first taxable lump sum withdrawal ( as I said above ) will miss 16-17 tax year cut off date....so when you fill in the tax reclaim form eg,in May 17 you are filling that form in for projected income,pension,savings for 17-18 ???? As it hasn't actually happened yet,Hope that makes sense !!

Yes i did think the cut off dates quoted on the other thread ( request by 17th paid by 28th) might be for drawdown but as I'm following this lump sum withdrawal through I guess I'll know for sure after the taxable lump sum gets paid sometime in April 17 ( am assuming I will miss 16-17 tax year cut off )

Nationwide8 · 25 March 2017 at 9:39PM

digannio wrote: »

I have done this twice with HL, in June 2015 and June, 2016, in each case withdrawing £3,600 after depositing £2,880 into the cash account in my SIPP and this is how it worked for me.

I ran through the simple risk questions over the phone (you can also send the form back through the post) and then was sent an application form detailing how much I wanted to withdraw etc. I sent this back and the money came into my nominated account within a few days.

At the time of my last UFPLS there was no arrangement in place for them to just transfer the money over after a telephone request. Running through the risk questions and filling in the subsequent application was the only way to do it. Maybe that's been simplified more recently but the above is my experience of it so far. Guess I'll find out in June when I do it again.

My UFPLS payment was taxed and I just claimed that back from HMRC straight away.

Hope this helps.

Thought of another question ( Sorry

) did HL tax your withdrawals even though ( I'm assuming ) you are a non tax payer and they had your tax code ( esp for the 2nd 2016 withdrawal ) ??

bowlhead99 · 26 March 2017 at 11:06PM

Nationwide8 wrote: »

I did the risk assess questions this morning ( and apparently that "lasts" 6 mths so if you withdraw again in that time you don't have to do it again ) on the phone so hopefully just will get the withdrawal forms mid week.

Rather than waiting until midweek for something to arrive in the post, you could have asked for the form that needs to be signed to be sent to you electronically by email as a pdf and then printed it out somewhere yourself - maybe you don't have a workplace or a printer at home, but plenty of internet cafes or libraries allow you to print documents out. Then you could stick them in the post tomorrow with guaranteed next day delivery to arrive with them on tuesday and have the best chance of getting a distribution processed by year end. So if I were you I'd be ringing them again first thing tomorrow.

To delay things and miss the year end (or at least not give yourself the best chance of not missing the year end) seems like a waste of several hundred pounds tax, if you have unused personal allowance this year and are going to be using up next year (and future years') personal allowance with the withdrawals of pension contributions from those other years. Although if you have loads of 'space' in your personal allowance in 2017/18 to receive it all tax free then instead without displacing other income, I guess there's is no real urgency.

Silly question .... but when you claim the tax back I will probably be claiming it back for 17-18 tax year as my first taxable lump sum withdrawal ( as I said above ) will miss 16-17 tax year cut off date....so when you fill in the tax reclaim form eg,in May 17 you are filling that form in for projected income,pension,savings for 17-18 ???? As it hasn't actually happened yet,Hope that makes sense !!

Normally the easiest way to claim tax back when you've had tax withheld at an emergency rate is wait to the end of the tax year, tell them what income you ended up having, and let them see that you had overpaid and give you back the difference.

You are right that it's probably harder to make the case to HMRC that you have paid too much tax in April 2017 when you haven't seen what income you are going to get for all the rest of 2017/18 yet.

If you pay too much money (e.g.) via PAYE one month due to an emergency tax rate and are paying ongoing tax each month, it's quite easy for your tax code to be adjusted so that future months you pay less tax and then by the end of the year you are all square. However, if you're not going to have any income coming in that needs to have tax deducted, there's no opportunity to 'fix' it in that way and they would have to physically send you a refund. Not sure if they are willing/able to do that when you haven't even got a twelfth of the way through the tax year yet.

But apparently worked for the poster above, I guess if your income has been under the limit for a few years running they know you're legit

I guess I'll know for sure after the taxable lump sum gets paid sometime in April 17 ( am assuming I will miss 16-17 tax year cut off )

As they say, hope for the best but prepare for the worst. However, if you can save a few days on the process by getting the UFPLS application form in your hand earlier by having it emailed to you by calling HL 8am monday morning, do that. I guess you might prefer to wait and see if anything arrives in the post tomorrow and if it hasn't arrived by lunchtime, give them a call and ask for an electronic copy ASAP.

Good luck with it all anyway.

Jerben · 27 March 2017 at 10:32AM

Just to clarify the situation I described in an earlier post of my partner getting her first UFPLS from HL...
The whole process was not 'exclusively' done by phone.
It was initiated by phone. ie. there was no searching on websites for the 'correct form', no complicated 'information packs' or 'difficult' questions to fill in. (Which was the subject original post point / question asked by Bowlhead).

Some fairly simple questions were answered in the phone call.
My partner then received a form, signed and returned it, then the money arrived in the bank.

Nationwide8 · 28 March 2017 at 2:13PM

bowlhead99 wrote: »

Rather than waiting until midweek for something to arrive in the post, you could have asked for the form that needs to be signed to be sent to you electronically by email as a pdf and then printed it out somewhere yourself - maybe you don't have a workplace or a printer at home, but plenty of internet cafes or libraries allow you to print documents out. Then you could stick them in the post tomorrow with guaranteed next day delivery to arrive with them on tuesday and have the best chance of getting a distribution processed by year end. So if I were you I'd be ringing them again first thing tomorrow.

Thanks again bowlhead,I only read this last night and decided if the form didn't arrive in this morning's post I'd ring and ask for the pdf.But I would have to get to a library as no printer at home so it would be a faff ...
But the form did arrive,I've filled it in and sent it off guaranteed next day delivery.Have no idea if that's too late for HL to pay the amount I want into my bank account..6 working days including the 5th April ??

Only thing I didn't have was a copy of a bank statement relating to the account where the money is going because I'm paperless everywhere ( save the trees !! ) and it didn't say it was 100% needed so we'll see.From now on I'll make sure I get paper statements from at least one bank.

To delay things and miss the year end (or at least not give yourself the best chance of not missing the year end) seems like a waste of several hundred pounds tax, if you have unused personal allowance this year and are going to be using up next year (and future years') personal allowance with the withdrawals of pension contributions from those other years. Although if you have loads of 'space' in your personal allowance in 2017/18 to receive it all tax free then instead without displacing other income, I guess there's is no real urgency.

If nothing is processed in this tax year from HL then in 2017-2018 assuming I do the same process if I drew all out from HL ( expect for the £1000 to keep it open ) I'd be over my PA so it may take me 2 tax years to draw out what is left in there now.If the payment is processed in this tax year then I can take it all out except the £1000 in 17-18

N]ormally the easiest way to claim tax back when you've had tax withheld at an emergency rate is wait to the end of the tax year, tell them what income you ended up having, and let them see that you had overpaid and give you back the difference.

You are right that it's probably harder to make the case to HMRC that you have paid too much tax in April 2017 when you haven't seen what income you are going to get for all the rest of 2017/18 yet.

If you pay too much money (e.g.) via PAYE one month due to an emergency tax rate and are paying ongoing tax each month, it's quite easy for your tax code to be adjusted so that future months you pay less tax and then by the end of the year you are all square. However, if you're not going to have any income coming in that needs to have tax deducted, there's no opportunity to 'fix' it in that way and they would have to physically send you a refund. Not sure if they are willing/able to do that when you haven't even got a twelfth of the way through the tax year yet.

But apparently worked for the poster above, I guess if your income has been under the limit for a few years running they know you're legit

Yes digannio hasn't replied yet...

Thanks again for the explanation....I won't be filling out a tax reclaim form this tax year even if i do get payment from HL before 5 April and then as you say how can I accurately fill out a tax return the beginning of a tax year ?? eg May 2017 ??....IF the payment does come through for 16-17 tax year I'll just see if I automatically get refunded when i get a tax statement.Last year it was about October.

As they say, hope for the best but prepare for the worst. However, if you can save a few days on the process by getting the UFPLS application form in your hand earlier by having it emailed to you by calling HL 8am monday morning, do that. I guess you might prefer to wait and see if anything arrives in the post tomorrow and if it hasn't arrived by lunchtime, give them a call and ask for an electronic copy ASAP.

Good luck with it all anyway.

Yes hope your mum's goes through before next Weds

I would never do all this so late in the tax year again as I'd invest earlier maybe about Sept and withdraw about Jan ( I think !! )

Being taxed when you shouldn't be is just a "complication" really and on the other thread someone mentioned that the later in a tax year you can withdraw a lump sum the better ie less tax you should pay.Would hope once HL get my tax code after this withdrawal i wouldn't be taxed on any further withdrawals in 17-18 but until you do it you don't know for sure.

Nationwide8 · 28 March 2017 at 2:33PM

Jerben wrote: »

Just to clarify the situation I described in an earlier post of my partner getting her first UFPLS from HL...
The whole process was not 'exclusively' done by phone.
It was initiated by phone. ie. there was no searching on websites for the 'correct form', no complicated 'information packs' or 'difficult' questions to fill in. (Which was the subject original post point / question asked by Bowlhead).

Some fairly simple questions were answered in the phone call.
My partner then received a form, signed and returned it, then the money arrived in the bank.

Thank you for coming back to clarify

Nationwide8 · 28 March 2017 at 2:55PM

Just thought of something..:o

Say you have £1000 left in the SIPP ( over the 1000 to keep it open ) in a new tax year.
You then pay in £2880.....get it topped up to £3600.

So is your tax free amount
25% of £3600
Or
25% of £4600 ( £1000 + £3600) ??

Malthusian · 28 March 2017 at 4:05PM

Nationwide8 wrote: »

Say you have £1000 left in the SIPP ( over the 1000 to keep it open ) in a new tax year.
You then pay in £2880.....get it topped up to £3600.

So is your tax free amount 25% of £3600 Or 25% of £4600 ( £1000 + £3600) ??

You've only drawn funds out of the SIPP via UFPLS, correct? If so, what remains in the SIPP is uncrystallised funds. Meaning you can take 25% of the uncrystallised £1,000, and 25% of the uncrystallised £3,600, so 25% of £4,600.

digannio · 28 March 2017 at 5:20PM

In answer to your earlier question, yes I was taxed even though I am a non-taxpayer. It's all to do with the tax code that's applied to you then being divided up on a monthly basis for tax purposes. Therefore the lump sum I withdrew exceeded the allowance for that month and I was taxed in the figures supplied by HL. I claimed the tax back straight away and it was refunded by HMRC. They said in the letter it was refunded using estimated figures for the year and that I would be contacted again if they owed me or I owed them at the end of the year. Neither was the case as I never exceeded the personal allowance at year end.

HL will probably be able to explain the above better than me if I've made it all as clear as mud! Anyway, I'm currently moving my SIPP from HL to Fidelity to take advantage of the £100 cashback offer and cheaper charges on the invested side of it.

Rob749 · 29 March 2017 at 8:25PM

Hi Jerben
Which income tax form was used ? Was it P55? Having trouble finding out which one to use ! thanks.

Taking first UFPLS from a small Hargreaves Lansdown SIPP

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