Cash Flow Spreadsheet

[piccadilly]

I am writing an Excel spread sheet that predicts my projected net income per year, which is mainly pension income, using various assumptions e.g 4% growth and so on.

This is a complicated exercise, as it involves LTA and the BCE's under flexible drawdown or UFPLS (from a combination of final salary schemes and a SIPP), and also other tax factors such as reduction in personal allowance etc.

Other sources of Income include dividends , rental income and a small salary.

Does anybody know whether this has been done already? - and is available on the web.

I am also struggling in determining whether a payment from a SIPP is a lump sum, or income withdrawal.

For example, if my starting SIPP fund is £1m, and I earn £40,000 in one year, but withdraw £60,000, is this treated as a lump sum, or income, for tax purposes once I go past the LTA.

Thank You.

[DrBunsenHoneydew]

...

I am also struggling in determining whether a payment from a SIPP is a lump sum, or income withdrawal.

For example, if my starting SIPP fund is £1m, and I earn £40,000 in one year, but withdraw £60,000, is this treated as a lump sum, or income, for tax purposes once I go past the LTA.

Thank You.

You can't withdraw without specifying what type of withdrawal you want (and so causing a particular BCE to occur).
You could crystallise 240k and take all 60k as lump sum if you wished or crystallise 80k and take 60k as income with no lump sum.

[piccadilly]

...

I am also struggling in determining whether a payment from a SIPP is a lump sum, or income withdrawal.

For example, if my starting SIPP fund is £1m, and I earn £40,000 in one year, but withdraw £60,000, is this treated as a lump sum, or income, for tax purposes once I go past the LTA.

Thank You.

You can't withdraw without specifying what type of withdrawal you want (and so causing a particular BCE to occur).
You could crystallise 240k and take all 60k as lump sum if you wished or crystallise 80k and take 60k as income with no lump sum.

Thank You - nice and clear - understood!

[swill453]

You can't withdraw without specifying what type of withdrawal you want (and so causing a particular BCE to occur).
You could crystallise 240k and take all 60k as lump sum if you wished or crystallise 80k and take 60k as income with no lump sum.

For completeness, you could also take £60K from uncrystallised funds as a UFPLS, meaning £15K is tax-free and £45K is income drawdown, with the rest of your SIPP remaining uncrystallised.

(UFPLS = Uncrystallised Funds Pension Lump Sum, sometimes said as "uffplus")

Scott.

[DrBunsenHoneydew]

You can't withdraw without specifying what type of withdrawal you want (and so causing a particular BCE to occur).
You could crystallise 240k and take all 60k as lump sum if you wished or crystallise 80k and take 60k as income with no lump sum.

For completeness, you could also take £60K from uncrystallised funds as a UFPLS, meaning £15K is tax-free and £45K is income drawdown, with the rest of your SIPP remaining uncrystallised.

(UFPLS = Uncrystallised Funds Pension Lump Sum, sometimes said as "uffplus")

Scott.

Quite so (...can't be dealing with all this modern flexible stuff!)

[piccadilly]

Actually, on more question, if once I have gone past my LTA due to past BCE’s, and I draw £60,000 as a lump sum, then the tax is £60,000 x 55% = £33,000.If I specify the £60,000 as income, and assuming a marginal tax rate of 40%,the tax would be £60,000 x 25% = £15,000 plus (£60,000 - £15,000) x 40% = £18,000.Total tax is £33,000. The effective tax rate under both scenarios is 55%.

Have I got this right?

[DrBunsenHoneydew]

Actually, on more question, if once I have gone past my LTA due to past BCE’s, and I draw £60,000 as a lump sum, then the tax is £60,000 x 55% = £33,000.If I specify the £60,000 as income, and assuming a marginal tax rate of 40%,the tax would be £60,000 x 25% = £15,000 plus (£60,000 - £15,000) x 40% = £18,000.Total tax is £33,000. The effective tax rate under both scenarios is 55%.

Have I got this right?

Yes. That's why the rates are what they are - to make it equal for the most likely (40%) pensioner.
They would not be equal for 60%, 45%, 20% or 0% etc. marginal rate pensioners though

[piccadilly]

Thank You.

Is there a 60% marginal tax rate?

[DrBunsenHoneydew]

Thank You.

Is there a 60% marginal tax rate?

Between £100k-123k, because of the loss of basic personal allowance in addition to the usual 40%, makes for a marginal 60% in that band.

[piccadilly]

Yes, I see what you mean.

I have built the loss of personal allowance into my spreadsheet.

Fortunately , there are plenty of sites on line where I am able to check the income tax calculation.

[thedukewood]

Did you manage to get a spreadsheet sorted?
I need a similar thing and could with some help please if you have got something that works
Thank you