ayshfm1 wrote:Divorce, pension share - wait a year ot two re-marry. Problem solved.
As long as the spouse hasn't run off with a younger model.
Scott.
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ayshfm1 wrote:Divorce, pension share - wait a year ot two re-marry. Problem solved.
Pheidippides wrote:The big elephant in the room on this is this, or a future government.
The 25 % TFLS is tax-free. The government have generously chosen NOT to charge you tax on a quarter of your pension pot. I am very cynical that this “generosity” is not reduced and then removed over time.
Regards
Pheid
hiriskpaul wrote:Is a full tax free 25% available from a SIPP if a DB pension is already being paid and the SIPP crystallisation subsequently pushes one over 100% LTA?
For example, if the DB pension used up 90% of the LTA and the SIPP is 60% of the LTA, is a tax free 25% of the entire SIPP available as a tax free PCLS? I have a feeling the answer is no and only 25% of the 10% unused LTA allowance can be taken as a tax free PCLS.
I don't have a DB pension, so this issue did not arise for me, but you might want to check this out and feed into your sequencing decision.
I have not done the calculations, but my gut instinct would be to start the DB pension at 55, with actuarial reduction and then fully crystallise the SIPP when you get close to 100% LTA.
Kantwebefriends wrote:Since if the SIPP isn't crystallised it will continue to grow during those 5 years ..
That seems to me to be a bold assumption. I think I'd wait for a market crash that takes the DC down well below the LTA and crystallise it then.
ursaminortaur wrote:Since if the SIPP isn't crystallised it will continue to grow during those 5 years and all that growth will make the LTA excess larger. (I'm assuming here that he achieves a reasonable growth and there isn't a worldwide financial crash, or that brexit or some other catastrophe doesn't destroy the value of the OP's SIPP which would obviously solve the OP's LTA problems but would be a bit of a pyrrhic victory).
Gostevie wrote:Pheidippides wrote:The big elephant in the room on this is this, or a future government.
The 25 % TFLS is tax-free. The government have generously chosen NOT to charge you tax on a quarter of your pension pot. I am very cynical that this “generosity” is not reduced and then removed over time.
Regards
Pheid
Indeed:
https://www.ftadviser.com/pensions/2019 ... -proposal/
This is why I took my lump sum as soon as I could when I reached 55 last year.
Gostevie
Shelford wrote:Many thanks for your thoughtful replies. Judging by the number of these and quantity of readers, this is a live topic. The number of folk getting caught out by the lowering of the LTA is getting much bigger. I suspect few readers of this board are wealthy in the Coutts Bank sense of the word. Many though I suspect are fed up by the unnecessary complexity of a system that by default appears to catch people unawares. It is hardly an incentive to save for old age.
One practical question if I may: if I take a TFLS from my SIPP at 55, but defer taking a pension from a DB pension till 60, does the BCE at 55 include the value of my DB pension for tax calculation purposes? My assumption is not on he basis I’m not exercising the DB pension, but I’d like to confirm this before doing my budgets!
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