HL SIPP withdrawal

[Dicky99]

This financial year, on account of having no income, I took advantage of the allowance to invest £2880 into a SIPP and have it grossed up to £3600.

From next year I'll be getting a small pension which will use almost, but not quite, all of my annual allowance and so I'll be withdrawing the funds and closing the SIPP down.

When I convert the investment into cash and request the funds to be transferred, will HL deduct tax which I'll have to claim back from HMRC, or will they pay me gross.

[ursaminortaur]

This financial year, on account of having no income, I took advantage of the allowance to invest £2880 into a SIPP and have it grossed up to £3600.

From next year I'll be getting a small pension which will use almost, but not quite, all of my annual allowance and so I'll be withdrawing the funds and closing the SIPP down.

When I convert the investment into cash and request the funds to be transferred, will HL deduct tax which I'll have to claim back from HMRC, or will they pay me gross.

If this is the first time you are taking money out of a pension with HL then they will almost certainly not have any idea of your tax position and not have a valid tax code to apply. Hence they will apply an emergency tax code and you will likely pay too much tax.

If you fill out a self assessment tax form each year you could wait and reclaim it with that otherwise there are forms which you can fill out to sort it out more quickly

see

https://www.litrg.org.uk/tax-guides/pensioners/what-tax-position-when-i-take-money-my-pension-flexibly