AVC to SIPP. Recycling or Not ??

Hawkey99 · Post by **Hawkey99** » 18 Feb 2018, 19:59

When you take your cash from your AVC can you then pay this into either you or your partners SIPP legally without triggering any kind of pension recycling law.

Thanks

Post by **nataddick** » 18 Feb 2018, 21:05

Take a look at this expert view on recycling rule.

http://www.hl.co.uk/__data/assets/pdf_f ... tsheet.pdf" onclick="window.open(this.href);return false;

lordthornber · Post by **lordthornber** » 19 Feb 2018, 16:01

Did you know you can pay £2880 or £240 per month, (£3600 - 20% tax relief), per year into a pension or SIPP up to the age of 75?

Yes it's true, obviously everybody's tax situation is different but if you are not paying tax and you can afford it its a win win. See below "If you don't pay income tax"

https://www.gov.uk/tax-on-your-private- ... tax-relief" onclick="window.open(this.href);return false;

jetblack · Post by **jetblack** » 19 Feb 2018, 20:01

Hawkey99 wrote:When you take your cash from your AVC can you then pay this into either you or your partners SIPP legally without triggering any kind of pension recycling law.

Thanks

Not directly, no.

Indirectly ?

The morality of it is a different issue of course. The NHS does rely on tax revenue after all. That being said, the tax contributions to the UK economy by the likes of Google and Amazon are, for all practical purposes, voluntary on their part.
And next to Google you and I are peanuts/small fry. If you and I are capable of understanding the tax rules such that we are able to minimise our tax bill, then why wouldn't we ?

FWIW, upon liquidation (to the extent that I ever will/if I ever will liquidate) I am prepared to pay CGT on my BTC. Whilst I'm not exactly happy for the Govt to take 20%. - especially given their ineptitude at investing my money wisely + the fact that Google et al choose their own rate of tax and, indeed, wether to pay it at all - I do realise and understand (and believe in) the need for state/Govt. taxation and the provision of public services.

Someone has to pay the tax. I suppose we should try to be the better man.

That being said, ethics are a bit of a rich mans luxury aren't they ?

Hawkey99 · Post by **Hawkey99** » 19 Feb 2018, 20:12

jetblack,

I agree with you about ethics. For me however I just want to stay within the law and therefore am trying to understand if legally I am allowed to pay my AVC money into my wife pension.

Cheers

Decky Boy · Post by **Decky Boy** » 19 Feb 2018, 21:00

My understanding is you can pay up to £40,000 per year into your private pension https://www.gov.uk/tax-on-your-private- ... -allowance" onclick="window.open(this.href);return false;

If you cash out your AVC then that cash becomes your's (tax free to do with as you choose) I see no reason why couldn't then use some or all to top-up your wife's pension ? ? ?

Post by **RobertT** » 20 Feb 2018, 04:40

The point is that you’ve received tax breaks when putting your money in the pension initially, if you’re doing that via RM you get both tax relief and salary sacrifice(PSE).

You then take it out tax free and then put it in another pension, and get more tax breaks.

It’s not as simple as ‘it’s my money and I can do what I want with it’. There are specific rules with this and the link nataddick provided gives good advice!

Hawkey99 · Post by **Hawkey99** » 20 Feb 2018, 16:22

Thanks all,

Have read what natadick provided but for me its still not clear.

In your view Robert is it lawful to pay my AVC lump sum into my wife SIPP (subject to her allowances)

jetblack · Post by **jetblack** » 20 Feb 2018, 16:45

I can't speak for Robert but I would say that yes, you would indeed be recycling (given certain conditions are met of course).

It has to be said also that HMRC are up to speed on this sort of stuff these days. Given as how we live in a largely cashless society - and given also that HMRC have a supercomputer ('Connect') that analyses financial transactions all the time looking for exactly situations whereby tax rules are being circumnaivigated, I'd say that you either 1) need to know what you are doing here or, if you don't 2) know someone who does.

I'm not a financial advisor, but FWIW, I'd say that you need to drip feed the lump sum over to your wifes sipp over a number of years to be on the safe side and to avoid being flagged up.

All depends on the size of your tax free lump sum of course + how much (if any) is normally contributed per annum to your wifes sipp.

Post by **RobertT** » 20 Feb 2018, 18:31

I can only really second what Jet has already said!

It depends on the amounts involved and whether you intend to invest the money in your wife’s SIPP in one go or over a period of time.