Scheme-specific Tax Free Cash Entitlement
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?