Pension problem

A client has a self-invested pension plan (SIPP) which includes several commercial properties. Rent is paid into the SIPP.

The client is thinking of drawing money from the plan. But it is difficult to take 25% of a property tax-free although they could be sold.

The client would prefer not to sell these income-producing assets and can take cash from the accumulated rent but what happens regarding future rent and increasing property values?

Is the 25% tax-free entitlement recalculated every year and the previous tax-free amounts then deducted from this?

Query 18 579 – Pensioner

Reply from John Wright and Liz Jones Davisons

First it would be wise to ask about the plans for the tax-free lump sum also and how quickly this will be required.

A request for a tax-free lump sum (a “pension commencement lump sum” or PCLS) from a UK-registered pension...