YouInvest - 25% Tax Free Query

[Darka]

We would like to take out the equivalent of 2 years worth of dividends from my wife's SIPP in September, this would be less than the full 25% Tax Free and so the rest of the 25% would be made up by selling some stock and repurchasing that in an ISA whilst using the dividends for their intended purpose.

My query is, when you inform YouInvest that you'd like to take out some tax free cash, do you specify a % or an amount?

I'm also still not sure whether I should take the whole 25%, or leave some for future withdrawals as I don't know how that would work in practice with regards to crystallised funds and whether the account would effectively be split into two pots, etc.

Of course this plan might change in March after the budget, depending on if Rishi makes any drastic changes to pensions.

regards,
Darka

[swill453]

If you're only taking out tax free cash, you specify that you want 25% of the whole amount, or a specific amount (which must be less than 25%).

If you don't crystallise it all then you're effectively splitting the pot, but that all occurs "behind the scenes" and when you look at it online it still appears as a single SIPP.

(Other providers may handle this in a different way.)

Scott.

[fisher]

You should always take 25% tax free at the point you crystallise otherwise you lose it.

You can just crystallise a portion of your whole SIPP to fit the amount of free cash you have a available. This is how I've handled my youinvest SIPP and it has worked well. I have crystallised twice over the last 18 months.

You just need to be armed with how much tax free cash you want to withdraw and then multiply this by 4 so you know the total amount you want crystallising. From memory it is the total amount you tell them but it might be just the 25%, it will be detailed when you choose the option. For example, if you want to withdraw 31,000 in tax free cash you want them to crystallise 124,000. When you go through the "Access my pension" option you choose the "tax free lump sum only" option. You can do a practice run on this without completing if you want to try it.