Firm offers 25% pension fund withdrawals on top of GAD limit
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Talbot & Muir is allowing Sipp and SSAS clients to withdraw 25 per cent of their pension fund each year in addition to the maximum allowed by the Government Actuary’s Department, even though it is subject to a 55 per cent tax charge.
Director Nathan Bridgeman says the firm has seen significant interest for the option, particularly among high-earners whose income tax rate is set to increase to 50 per cent from next year.
Bridgeman says: “Clients already taking the maximum income either via scheme pension or income drawdown can now take an additional 25 per cent of their pension fund.
“As long as they do not go over that, they suffer a 55 per cent tax charge as an alternative to income tax and you can repeat that every 12 months.
“For people who want to get their funds out of their pension and in the hands of beneficiaries, a 55 per cent tax charge now is better than paying 82 per cent later.
“For others who want to clear their fund for ill health, for example, this method will provide a significantly qui-cker way of getting the money than taking out an impaired life annuity, for example.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “This sounds like a good option as long as the client is fully aware of the penalties and the adviser clearly documents the recommendation.”
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