Withdrawal Options From Janes SIPP

Question 1

Identity the options Jane has for taking withdrawals from the SIPP she inherited and explain giving reasons, the tax treatment applicable (9)

Answer 1

Options:

• lump sum
• lifetime annuity
• flexi access drawdown

Tax treatment:

• income would tax free as brother died before 75
• and Jane designated the fund to a fad within 2 years
• no LTA test when Jane takes withdrawals
• as Jane is not the member
• pension remains outside Jane’s estate for IHT purposes