The Lemon Fool

I have a couple of SIPPs - both are fully crystallised inasmuch I have taken the full 25% TFLS. Nothing else has been withdrawn. However they contain funds and shares that have generated dividends over a number of years post crystallisation. Are these dividends effectively crystallised or are they treated as uncrystallised - hence a TFLS can be withdrawn in relationship to the totality of dividend income post crystallisation?

Thanks for any responses.

T7

terminal7 wrote:I have a couple of SIPPs - both are fully crystallised inasmuch I have taken the full 25% TFLS. Nothing else has been withdrawn. However they contain funds and shares that have generated dividends over a number of years post crystallisation. Are these dividends effectively crystallised or are they treated as uncrystallised - hence a TFLS can be withdrawn in relationship to the totality of dividend income post crystallisation?

Thanks for any responses.

T7

They are simply part of the crystallised pot. The concept of 'income' in a SIPP does not really apply. Income, gains, losses etc makes no difference. You don't submit a tax return for them, the dividends, gains and losses are not taxable events. You simply have a 'pot'.

scrumpyjack wrote:

terminal7 wrote:I have a couple of SIPPs - both are fully crystallised inasmuch I have taken the full 25% TFLS. Nothing else has been withdrawn. However they contain funds and shares that have generated dividends over a number of years post crystallisation. Are these dividends effectively crystallised or are they treated as uncrystallised - hence a TFLS can be withdrawn in relationship to the totality of dividend income post crystallisation?

Thanks for any responses.

T7

They are simply part of the crystallised pot. The concept of 'income' in a SIPP does not really apply. Income, gains, losses etc makes no difference. You don't submit a tax return for them, the dividends, gains and losses are not taxable events. You simply have a 'pot'.

If you have only taken the 25% tax free lump sum so as to preserve your full Annual Allowance (ie not cause the MPAA to be invoked) and have contributed more to the SIPPs since crystallisation then those contributions and their growth (whether from dividends, interest or capital gains) will be uncrystallised. With some SIPP providers this will be obvious as they will be presented as a separate uncrystallised pot but with others such as A J Bell Youinvest it will be somewhat hidden as your full holdings will be presented as one pot with things being dealt with behind the scenes. These uncrystallised funds could then at some point be crystallised by taking 25% of them as another tax free lump sum.