Returning additional funds after annuity purchase
Irene
Member
Hi,
I've never come across this situation before. But we have a client where we partially transferred some funds from a SIPP to purchase an enhanced annuity. Due to some additional medical information, the annuity provider has increased the rate, therefore they don't require all the funds, and are transferring the excess back to the SIPP. To be fair the annuity provider gave the option of increasing the income to client based on the new rates, but for some unknown reason our Adviser advised not to.
Does anyone know can these be paid back to the original SIPP? What happens to these excess funds, when it is paid back to the SIPP provider? I assume, it wouldn't be classed as a new contribution.
If not, will be have to find a "new home" for these funds?
Thanks in advance.
Irene
Comments
Was there any tax-free cash involved, and if so, who paid it? I suspect this may influence the decision.
There was no TFC paid
You need to ask the SIPP what hey are willing to do. They can just take it back and reinvest it.
It's definitely not a contribution, it's inside the pension system and hasn't left it. If it ends up with the person it will be an unauthorised payment.