Fixed Protection and TFC

GarethM

Afternoon All,

We have a client who has FP2016 of £1.25m, but perhaps more importantly now, a protected TFC limit of £312,500. Prior to the spring budget, he had used 100% of his FP2016, the majority of it by taking his DB pension.

As it happens, he's also taken his full TFC entitlement through the DB pension, but it raised an interesting question. If he had taken a lower lump sum of, say £212,500 from the DB scheme, would he now be able to crystallise £400K of his accrual pot, to take the remaining TFC of £100K, even though he had previously used 100% of his FP?

My understanding is that any excess lump sums are now taxable at the members marginal rate, but is the available TFC a monetary figure or still linked to the % of LTA previously used?

Thanks

Gareth

les_cameron

It’s still linked, for 23/24 at least.

les_cameron

https://citywire.com/new-model-adviser/news/a-guide-to-the-new-25-tax-free-pension-lump-sum-rules/a2414254?re=108036&refea=268738

GarethM

Thanks Les.