Scheme Specific PCLS - brain hurting
benjaminfabi
Moderator
Hi,
Scheme administrator has said:
The member’s pension commencement lump sum entitlement at 5 April 2006 is £17,938.49. The member’s fund value at 5 April 2006 is £49,415.25. Upon retirement the member is entitled to either (a) 25% of their fund value or (b) £17,938.49 increased in line with the Lifetime Allowance plus 25% of the fund accrued post A-Day.
I'll round up and say the current fund value is £1.5m.
The revalued VULSR is £21,526. And 25% of the post a-day fund (ALSA) is £366,162.
What can the member have as PCLS? Is it simply £21,526 plus the capped £268,275 in respect of the post a-day accrual?
I can't believe it is what the administrator has claimed in (b) above. I feel like I should know this but I've never had a case with SS PCLS and a value above the max PCLS amount.
Comments
My understanding is that any lump sum in excess of 25% of LTA is taxed as income, so the £268,275 cap would still apply to the whole fund.
Can't see anything online to actually confirm this though, so looking forward to an expert providing a definitive answer.
This year they get the full amount subject to having adequate LTA - https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/primary-protection-tax-free
Not sure if @TimMatthias is referring to next years rules as referencing an excess taxed as income.
Basically the same next year but if you have LTA protection your SSPTFC may actually be higher than this year.
There is no cap on it next year either.
Read the PCLS section and watch the video. https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/lifetime-allowance-abolition-from-2024
Thanks Les