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Where Taxpayers and Advisers Meet

SIPP taxation

Posts: 1
Joined: Sat Jul 25, 2020 12:20 pm

SIPP taxation

Postby dermvc » Sat Jul 25, 2020 12:23 pm

I have a large occupational pension and will be retiring next year. The total value of occupational pension exceeds the current lifetime allowance and I will be subject to a tax charge when this is crystallise. I also have a SIPP pension which I will not be crystallising for the foreseeable future.

Could you confirm that no tax charge is due on my SIPP until it is crystallised
If in 20 years time, I decide to crystallise it, will it be tested against the amount of the life time allowance at that time which may be considerably more than at present

Posts: 262
Joined: Tue Sep 26, 2017 6:28 pm

Re: SIPP taxation

Postby AdamS93 » Sun Jul 26, 2020 8:58 am

It is calculated using percentages.

If you use up 100% of your lifetime allowance, you will have 0% of it left when the SIPP crystallises. So even if the lifetime allowance increases 0% of £1.5m is still £0 for example.

It is a nice problem to have, but there is very little you can do (if anything) to avoid this charge now.

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