Client has a property value approx £175,000 held in a pension fund and wonders if under the new rules they can sell this privately (lump sum withdrawal)?
Also, he is already drawing a pension from the funds, so does this mean that it is not possible?
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He needs financial advice.
Yes he can sell the property. Yes he can make a withdrawal. He could be in capped drawdown in which case he is limited by the GAD rates as to how much income he can take (he may have taken the full tax free cash if there was enough liquid assets after the property was independently valued at crystallisation). If in flexible drawdown he can take it all now taxed at their highest marginal rate.
After April the above still applies. The only difference is that if the client is in capped and wants to take the full property value out they now can by moving out of capped and that would involve changing contracts to a flexible drawdown. By doing this, future contribution limits would be reduced from £40,000 per annum to an annual allowance of £10,000. However, the client could take as much or as little as they wish, tax accordingly.
Yes.
Last week two of my clients had the commercial property valued and they took 25% of the total SIPP value in cash as they had enough liquid assets. This left the commercial property in the SIPP, the rental agreement continued saving their business corporation tax on the value and funding their pensions for retirement.
They could even take the commercial property out as tax free cash if its value is within 25%.