Tax on amount above LTA

[SoBo65]

I am about to withdraw my 25% tax free cash from my two SIPPS. I took out Fixed Protection at £1.25m and with the recent surge in shares prices, I will be slightly over this amount. I assume I will be liable to 55% tax on the surplus, my question is how does this work? Do I withdraw the surplus and declare it on my tax return? Any pointers would be appreciated.

[Chrysalis]

I believe the pension providers take the tax at source. When you apply to go into drawdown you have to declare any other pensions, so that they can do the correct calculation.
If you take the excess as a lump sum it is 55% taxed, if you take it as income you pay 25% as you withdraw it, plus the relevant income tax.

[ffacoffipawb64]

I am about to withdraw my 25% tax free cash from my two SIPPS. I took out Fixed Protection at £1.25m and with the recent surge in shares prices, I will be slightly over this amount. I assume I will be liable to 55% tax on the surplus, my question is how does this work? Do I withdraw the surplus and declare it on my tax return? Any pointers would be appreciated.

Crystallise up to LTA and take its PCLS and leave the rest over LTA uncrystallised until really needed?

That is my intention. waiting to take my smaller DB early when it matches revalued GMP (they wont let me otherwise). This will leave me with about 3% LTA left. Take my 2 remaining small pots and the 3% LTA from my SIPP. Leave the rest uncrystallised, approx 15% LTA, until 75 when I have no choice in the matter.

Hargreaves Lansdown will "create" (ahem) small pots specifically for this by separating £10k out of a SIPP into a new arrangement. They have done this for me once already.

[Steveam]

See this thread and scroll down to Ursaminitaur’s post ...

viewtopic.php?f=30&p=261927#p261927

Best wishes,

Steve