Apologies in advance if this is obvious to others or has been discussed previously.
I have several smallish Company personal pensions and a SIPP.
This year I would like to "take out" an amount, say, £20000.
If I take it from one of the Company personal pensions I get an amount of £20000 taxable at 20% so a net total of £16000.
If I transfer it to my SIPP and then take it as drawdown I get 25% tax free (£5000) plus £15000 taxable which is £11250 - so net £16250.
Doing it through my SIPP therefore is more advantageous or am I missing something?
Income Payment vs Drawdown Payment
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- Lemon Half
- Posts: 5804
- Joined: November 5th, 2016, 9:05 am
Re: Income Payment vs Drawdown Payment
The tax rules for withdrawal from Company personal pensions should be identical to those from SIPPs. In other words, the right to take 25% out free of tax applies across the board.StayinAlive wrote: Doing it through my SIPP therefore is more advantageous or am I missing something?
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- Lemon Slice
- Posts: 770
- Joined: November 4th, 2016, 10:58 am
Re: Income Payment vs Drawdown Payment
I assume you are over 55?
The tax rules should be the same, but not all pensions offer all the withdrawal options.
You might consider an appointment with pensionwise
The tax rules should be the same, but not all pensions offer all the withdrawal options.
You might consider an appointment with pensionwise