Zero income tax

[Fred Bloggs]

Even with a SIPP you still have to buy an annunity eventually.

What Moorfield said.

I believe that there are precedents now for putting almost all your company turnover in a SIPP. I'm sure an IFA effectively said this had effectively been given the OK by HMRC now.

[tim123]

No, this is something not realised by many I think.

You can take an "alternatively secured pension" income at 75 rather than purchasing an annuity. The rules I think only allow you to take up to 90% equivalent income that an annuity would provide (hence encouraging you to take the annuity) but you retain ownership of your pot, not the lifeco giving you the annuity, and therefore can pass it to your beneficiaries upon death.

OK I have been and read the rules and they only allow you to transfer the pension payments to a dependent, not the capital.

tim

[Fred Bloggs]

I believe you can will the pension pot but it is subject to a penal tax rate, 84% IIRC. Something to do with a concession that was originally made for a religious sect called the Plymouth Brethren. Again, IIRC, they can't take annuities for some reason it's against their beliefs.

Something like that anyhow..............

[GreenerGrass]

At the moment I am only paying a relatively small amount into a SIPP through company contributions, but with a bigger bench fund in place and more of the mortgage paid off I will increase these to be equivalent to 100% of salary.

Due to hideously vague HMRC guidance it seems opinion is split on whether you can only match 100% of salary or go way, way beyond that - my accountant won't give a clear answer of what I should do, they just act like some kind of scared parrot (SJD btw).

But tim makes a good point about not being able to fully enjoy the money over a certain age, and having to live to 90 to claw everything back.
As such I will probably never pay in over 100% of salary (typically about 12k pa for many of us) even if allowed, and a 1k p/m contribution seems plenty given the uncertainty of ever being able to spend it all.
Maybe if you are near retirement, have paid off the mortgage, are not having to make sacrifices in other areas of life, and need to boost your pension pot then I can see the point in ploughing everything into a SIPP.

It definately seems worthwhile to build a big enough SIPP pot to give you an income of something like 10k pa after you have taken the 25% tax free lump sum, and boosting this with ISAs etc. and maybe BTL property so you also have investments where you can access 100% of the capital if required.
Also I want to start taking my pension at 55, not waiting to build it up ever higher until I am 75 and then dropping dead at 76. There is much you can do in your 50s that you can't in your 70s.

[mailric]

Instead of these ridiculous schemes which will end you up in all sorts of trouble (search for TRM, Redding, AML), if you want to pay no tax then you might be better off just not declaring any income at all... and take the risk of being caught. Probably less risky than these schemes!

Otherwise, take it on the chin and pay up like the rest of us...

with a few deductions here and there, of course

[ASB]

Due to hideously vague HMRC guidance it seems opinion is split on whether you can only match 100% of salary or go way, way beyond that - my accountant won't give a clear answer of what I should do, they just act like some kind of scared parrot (SJD btw)

Do a seach on salary sacrifice. Might be a way round. Basically pay yourself 100k and sacrifice 100k of salary for pension contributions.