Don’t forget the SIPP becomes subject to IHT from April 2027. Gets even worse after age 75
The "Double Tax" Risk After Age 75Dying at age 75 or older after April 2027 creates a heavy tax burden:Inheritance Tax (IHT): The estate pays 40% tax on the pension value that sits above the standard tax-free threshold (usually £325,000).Income Tax: Beneficiaries must also pay Income Tax at their personal rate (up to 45%) when they withdraw the money from the inherited pension.Combined Impact: The total tax taken by the government can exceed 60% of the pension's original value because both taxes apply.
More than fully aware of all you say, and given my previous comments and the excellent contribution by John Harris above, you will not be surprised when I offer no objection to the HMRC changes to SIPP's that you have outlined, even if those changes are contrary to my own self interests.
The changes you mention have probably encouraged a worthwhile (for the economy) change in strategy amongst many of us with drawdown SIPP's. So instead of leaving a SIPP largely intact to benefit our heirs, the changes have encouraged me and many others to draw down on the SIPP notwithstanding the 45% tax to enjoy and distribute it now rather than leave it to be passed on after death. As I mentioned previously I got tax relief when I put money iinto the SIPP, I can hardly expect that it should not be taxed when I withdraw from a fund that has also grown exponentially in the interim years.
You know it makes sense! 