What are the implications of auto-sales from a SIPP?

Q: Please can you advise whether there is a tax implication / pension allowance implication on the auto-sale of investments from a SIPP, to service administration fees? It is unclear how these should be considered for tax purposes (i.e., whether or not they constitute a form of drawdown)

A: We get asked this a lot. I’m pleased to say it’s an easy question to answer. Service fee deductions don’t count as drawdown. There are no tax consequences here. And they don’t affect your allowances.

What I would say, is that if you want to protect the amount of money you’re putting into a pension - to make sure that it’s growing in its entirety for you - you might want to keep money in your Cash Management Account. Either that or hold some extra money in ‘cash available to invest’ as we’ll take your fees from there before selling down your investments.

• We pay interest on cash - learn about our current rates.

If you’d like to get on a front foot and get a broad idea of what your fees could be over a year, this fees calculator can give you an estimate. It has its limitations, as it can only calculate our service fees and dealing fees as charges - but it will help to give something to work from.

• See our fees calculator

Jack Cornell - Senior Relationship Manager

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of financial adviser or an authorised financial adviser of your choice.