Tax benefits of a SIPP
If you’d like to reduce your tax bill, a SIPP is a great way to do it.
- For every 80p you pay into your pension, the government adds another 20p*. We claim this basic rate tax relief for you.
- J.P. Morgan will invest this tax relief immediately (one of the few companies to do this) rather than waiting until we have received the monies from the government.
- If you’re a higher rate tax payer, you may claim up to a further 20p for every £1 of gross contribution via your tax return, depending on your annual income.
- Your SIPP investments will grow free of capital gains and income tax.
- You can transfer existing investments from another pension or move the proceeds from other investments that are not in a tax-efficient wrapper into your J.P. Morgan SIPP so you can benefit from the tax-efficient status.
- When you take your benefits you may take up to 25% of your SIPP as a tax-free cash lump sum between the ages of 55 and 75*.
- You will usually be able to start drawing your pension from the age of 55.
Risks:
The value of your investments and the income from them may fall as well as rise any you may not get back the original amount invested.
* Subject to UK government limits and restrictions.
Example: Lump sum contribution to J.P. Morgan SIPP (based on higher rate tax payer earning £52,000)
In this example, if you contributed £8,000, we would claim £2,000 tax relief (20%) on your behalf which would be invested immediately in your J.P. Morgan SIPP. Higher rate tax payers may also claim up to a further £2,000 (20%) via their tax return.