I hold some units of ETF funds in my SIPP that pay dividend so that the portfolio contains some cash as well which I would like to pay out as Uncrystallised Funds Pension Lump Sum (UFPLS) about 4 times a year.
Taxation-wise, does it matter if I sell the units or just pay out the cash part of the portfolio?
Is 25% of each payment tax-free and the remaining 75% added to my taxable income for the tax year? For instance, if I pay out £20,000, is £5,000 tax free and then £15,000 taxed but after deducting personal allowance of £11,500 only £8,500 is actually taxed at 20% meaning a tax bill of £1,700?
Can I request as many UFPLS as I like?
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