Section 32

Hi All,

I am a bit rusty on protected tax-free cash, can anyone clarify on whether you can transfer a wound up single member scheme to a s32 and keep the protected tax?

I have a client with an old occupational scheme which was wound up a number of years ago and he kept the protected tfc, if he now transfers the benefits out to a S32 will he lose the tfc entitlement (unless it is a buddy transfer which won’t be possible)?



  • In standard cases, this would be lost if transferred to another pension scheme.

  • Thanks, I was just unclear if the existing wound up status made any difference, I couldn’t find any clear guidance online.
  • I think if the scheme has been wound up then this would be retained. It's usually lost on plans where the scheme has not been wound up. I'm 85% on that but would welcome anyone else's views....

  • S32 transfer to another S32 - protected PCLS can be kept.
    I have clarified this with HMRC by phone in the past (as well as with a highly regarded tech person from a large UK life office).
    Transact accepts the enhanced PCLS as receiving scheme provided they have the enhanced level confirmed by the ceding scheme. This is key - the receiving scheme needs to accept the enhanced PCLS calc.
    This is allowed as the S32 is wound up on transfer (as it is a standalone single member occupational scheme) so buddy transfers etc are not required.

  • That's handy information Richard, as suspected.

  • Thanks, I am not 100% the wound up fund is considered an existing s32, I am thinking it is more a deferred annuity. Aviva are unclear other than saying it is a wound up single member occupational scheme, so I probably still need to drill down a bit more. Yes, Transact S32 would be the route if I can be sure we would keep the protected tfc
  • richallumrichallum Administrator

    Les Cameron from Prudential / M&G saw this and emailed me some thoughts....

    They need to investigate - the scheme is wound up so the money is no longer in the scheme and what they have is not a one member OPS.

    What happened on wind up:

    a) a deferred annuity bought
    b) a s32 bought.
    c) the policy was placed in the members name.

    In these scenarios they should have kept PTFC.

    They are now in a one member scheme so they cannot by definition do a block transfer so a transfer will lose them PTFC.


    If they wind up what they currently have and transfer on to a new s32/deferred annuity they can still keep protections as the winding up means it meets the block transfer conditions.

    Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern. 

  • Fabulous- I had a vague memory there was something tricksy like this but I couldn’t quite put my finger on it. Thank you that really helps!
Sign In or Register to comment.