This page works through how a retired couple can draw £48,000 in a year without paying a penny of tax, using nothing but ordinary allowances that reset every April. It is a composition of published rules, shown line by line, not a loophole and not a plan.
Raj and Ela are fictional. Both are 62, retired, and five years from state pension age, so neither has any other taxable income yet. Between them they hold SIPPs, ISAs, a general investment account where about 40% of any sale is gain, and some cash savings. They want £48,000 for the year, £24,000 drawn by each.
The reason a couple is the right unit for this page: almost every allowance in the UK tax system is personal. Two people do not share one set, they hold one set each, and a couple who can choose which name each pound of income arrives in can use both sets in full. That is the entire trick, and it is not a trick.
Each line names the rule it uses. Both halves of the couple run the same stack, so the couple column is simply double the person column.
| Income line | Rule used | Per person | Couple | Tax |
|---|---|---|---|---|
| Pension crystallisation: £16,760 taken, of which 25% is tax-free cash | 25% tax-free cash (within the £268,275 lump sum allowance) | £4,190 | £8,380 | £0 |
| Pension income: the other 75% of that £16,760 | Personal allowance £12,570, exactly filled | £12,570 | £25,140 | £0 |
| Savings interest | Personal savings allowance, £1,000 at basic rate | £1,000 | £2,000 | £0 |
| Dividends from the GIA holdings | Dividend allowance £500 | £500 | £1,000 | £0 |
| GIA sale proceeds: £5,740 sold, £2,296 of it gain | CGT annual exempt amount £3,000, not even fully used | £5,740 | £11,480 | £0 |
| Total drawn | £24,000 | £48,000 | £0 |
The pension line is the engine of the stack. £16,760 is not a magic number: it is the crystallisation amount whose taxable 75% comes to exactly £12,570, the personal allowance. Anything drawn in this pattern before other income exists is tax-free twice over: a quarter as tax-free cash, three quarters swallowed by the allowance.
Information and guidance only. Not personal advice. This is a composition of published allowances applied to a fictional couple, shown to explain how the rules interact. It is not a recommendation to draw from any wrapper in any order. Investment values can fall as well as rise. Verify decisions with a qualified FCA-authorised adviser before acting.
Raj and Ela stopped at £48,000 because that is what they wanted to spend. The rules would have let the £0 bill stretch further.
The mirror image is also true: the stack shrinks the moment other income arrives. That is the first honest caveat below.
Four dependencies, stated plainly, because a stack this clean has conditions attached to every line.
Related pages: which pot to draw first shows what each wrapper's withdrawal costs when the allowances run out, and Meera's timeline walks the same rules across a whole retirement rather than a single year.
Methodology. All figures from rules bundle UK-2026.1.1 (tax year 2026/27): personal allowance £12,570, personal savings allowance £1,000 (basic rate), starting rate for savings up to £5,000 at 0%, dividend allowance £500, CGT annual exempt amount £3,000, tax-free cash 25% within the £268,275 lump sum allowance, MPAA £10,000, state pension £12,548. Stack: crystallise £16,760 so that 75% (£12,570) exactly equals the personal allowance; GIA sale £5,740 with 40% gain content realises £2,296 of gain, inside the exempt amount; per person £16,760 + £1,000 + £500 + £5,740 = £24,000; couple £48,000. All arithmetic machine-checked before publication. Published 7 August 2026 · figures last verified 7 August 2026.
Sonuswealth is pre-launch. The app builds the allowance stack from your actual wrappers and income, and rebuilds it as the rules change each April.