Scheme-specific Tax Free Cash Entitlement

Paulrobo10

Hi all, I hope you are well.

We are calculating the scheme-specific tax-free cash entitlement for a client who is in a with-profits policy. Due to the terminal bonus, the transfer value is higher than the fund value.

I know the calculation is as follows:

Increase A-Day tax free cash by 20% + 25% of any increase in the value of pension rights since A-Day (i.e., (amount of benefits crystallising less adjusted A-Day value of pension rights) x 25%).

However, in the second part of the calculation, do you use the fund or transfer values currently and at A-Day?

Many thanks,
Paul

les_cameron

It should be the value of sums and assets available for the purchase of benefits.

So the transfer value.

Best check the scheme agrees.

Paulrobo10

Many thanks Les, I will double check with the scheme.

Best wishes,
Paul