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Recycling SIPP 25% back in to the SIPP. Legal?

bucklb
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Recycling SIPP 25% back in to the SIPP. Legal?

#474605

Postby bucklb » January 19th, 2022, 11:13 pm

Hi

I've been meaning to look in to what triggers the maximum that can be put in to a SIPP, and get tax relief, to drop to £4k (maybe even £3.6k) for a while now. I think the term is MPAA. I've just seen an article in Share magazine that suggests that the trigger for this is to take non-tax free cash from any SIPP, so was hoping to check my understanding please.

I suspect I'm a year or two from retirement (just turned 57) so plan to keep having earnings for a wee while. If I take the 25% tax free sum this year (assume that'll be £24k) can I put that back in to the SIPP over the next couple of years? I'll obviously need to keep the total I put in to all pensions (I also have a civil service pension I pay in to) below £40k but I suspect that's not an issue for me.

Is that a legal thing to do? I'm slightly worried that it might count as "recycling" the tax free part of the pension and draw the ire of the authorities

TIA
Bob

mc2fool
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Re: Recycling SIPP 25% back in to the SIPP. Legal?

#474614

Postby mc2fool » January 20th, 2022, 12:53 am

bucklb wrote:Is that a legal thing to do? I'm slightly worried that it might count as "recycling" the tax free part of the pension and draw the ire of the authorities

Recently covered here: viewtopic.php?p=471916#p471916

As I say later in that thread, the rules are complex and if it's not clear how your situation fits from the sources linked to in that post then do google for others, as many/most have various examples.

moorfield
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Re: Recycling SIPP 25% back in to the SIPP. Legal?

#474952

Postby moorfield » January 21st, 2022, 9:35 am

bucklb wrote:
Is that a legal thing to do? I'm slightly worried that it might count as "recycling" the tax free part of the pension and draw the ire of the authorities

TIA
Bob



If there is a Mrs Bob or Bob Juniors you could consider recycling some into their pensions instead. That will indirectly claw back some tax, if that's what you are aiming to do, and pass on some inheritance.


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