magazine archive
magazine archive
Ask Rachel
How can I avoid falling foul of HMRC recycling rules?
Thursday 14 Aug 2025I’m planning on withdrawing around £28,000 from my SIPP around January 2026 but don’t want to fall foul of HMRC’s tax recycling rules with my pension contributions during this tax year. I think I get the idea of not increasing my cumulative contributions (triggering tax relief) ‘significantly’ (30...
Does it matter when I take my 25% tax-free allowance?
Thursday 07 Aug 2025My question is about taking 25% tax free cash if you have a number of pension pots and if there are any time constraints. In my case, I took early retirement after April 2006 and 25% of my defined benefit pension fund, over £100,000 tax free. I have a SIPP with value of £160,000 and I need to...
What are the rules on receiving income if I have several different pension schemes?
Thursday 31 Jul 2025I’m a member of a defined benefit scheme which has my normal retirement date as my 62nd birthday. If I start to receive income from this scheme from this date does this crystallise the funds in my company defined contribution and personal pension schemes? Neil Rachel Vahey, AJ Bell Head of Public...
Should I move dividend payers out of my SIPP to take the income?
Thursday 24 Jul 2025I have a question about SIPPs and dividends. My SIPP is geared to generate significant dividend income in retirement, but are the dividends classed as income, so rather than 8.75% tax I’d be liable for the 20% basic rate of income tax (as long as I don’t breach the £50,270 limit)? I don’t want to...
How do the carry-forward rules on pension contributions work?
Thursday 17 Jul 2025I could do with clarification on the carry forward rules. The guide is that I must have used up my full allowance for the current tax year. I am taking very low salary as a director of my own business so my earnings are capped at £12,570. Last year I put the maximum I can personally place into my...
Can I cash in my pension and invest the money myself?
Thursday 10 Jul 2025I am seeking help regarding cashing in a pension plan completely to invest the money myself, or withdrawing some money from the plan to invest myself. I am seeking help regarding cashing in a pension plan completely to invest the money myself, or withdrawing some money from the plan to invest...
Can I transfer assets from a general investment account into a SIPP?
Thursday 03 Jul 2025I have a GIA (general investment account), currently valued at around £170,000. I’m looking at how best to preserve this investment in the most tax efficient manner. I would like to transfer from the GIA into a SIPP. However, I realise any gains over the £3,000 CGT allowance will be taxed at 18% as...
Can you help me understand the situation now the lifetime allowance has been removed?
Thursday 26 Jun 2025I have two pensions, a BT pension (defined benefits, which I have started to draw from) and a SIPP which is yet to be crystallised. At the time of starting to take my workplace pension in 2022/23, I was told that this amounted to 27% of LTA (lifetime allowance). I took a lump sum as well as a...
How much do pension contributions reduce my taxable income by?
Thursday 19 Jun 2025I’m likely to become a higher rate taxpayer this financial year. If I choose to pay into a SIPP for the tax benefits, how much do I need to invest to reduce my taxable income by £100. Is it £100 or £80? Also how do I then claim the tax back to allow for the 40% rate I will have paid on that £100?...
Can I contribute proceeds from the sale of a property to my SIPP?
Thursday 12 Jun 2025I am currently taking taxable income from a SIPP in drawdown. I will be completing on the sale of a property shortly. Am I able to contribute £10,000 of the sale proceeds from the property to my SIPP under the money purchase annual allowance? Rob Rachel Vahey, AJ Bell Head of Public Policy, says:...