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Where Taxpayers and Advisers Meet

Starting SIPP after earlier triviality payments

EF101
Posts:27
Joined:Fri Oct 30, 2015 12:26 am
Starting SIPP after earlier triviality payments

Postby EF101 » Tue Feb 14, 2017 9:19 am

I just want to check the position in relation to my wife, who has not worked for may years. During her earlier working life she acquired 3 pensions, and some years after they were introduced a SIPP. I was not efficient about using her annual £3,000+ allowance whilst she was not working. The result was that 3 of these pensions pots (including the SIPP) were very small and one is still worth around £30k.

I cashed in the 3 small pots (including the SIPP) as "triviality payments" a couple of years ago when her unearned income was particularly low. She took 25% of each pot tax free and paid tax on the rest.

Her unearned income has now risen and I would like to use this years £3,600 allowance and the unused allowance for the previous 3 years to offset against this year's income.

She was still a member of one scheme throughout this period, but I am not sure if they would accept new contributions, and in any event, my preference would be to open a new SIPP. Is this permissible ?

Am I correct that the triviality payments are not a bar to future contributions (there is no question here of 'recycling') ? If they are not a bar, to get carry forward relief do the contributions have to be into a scheme that was alive in the earlier years, or is it sufficient that she had another policy alive at that time which still remains alive ?

Any help appreciated (as always) !

JOHNRE
Posts:91
Joined:Sat Feb 06, 2016 2:03 pm

Re: Starting SIPP after earlier triviality payments

Postby JOHNRE » Sat Feb 25, 2017 11:47 am

My understanding, from Hargreaves Lansdown, is that, if you are a "non earner" (ie do not have relevant earnings to put into your pension), you cannot take advantage of Carry Forward. My wife was in the same boat, she can only put £2880 a year into her Sipp and wanted to make a contribution for 2014-15.....


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