Scheme specific tax-free cash protection and tax free lump sums

fredboiii95fredboiii95 Member
edited March 15 in Technical stuff

Hi all,

Would be great if you help / give thoughts on the below situation:

I have a client with following pensions and no fixed protection:

Scheme A - DB Pension already in payment. LTA used by 18.3% and received tax-free cash of £49,094

Scheme B - Money Purchase Plan that has scheme specific tax free cash protection which means can take the whole plan value of £43,000 as tax-free cash. (uncrystallised)

Scheme C - Money Purchase Plan valued at £900,000 (uncrystallised)

Taking the above into account, want to discuss with client strategies/options to maximise taking tax-free cash and if any of this should be done before 6 April 2024.

My initial thoughts are that if looking to purely maximise tax-free cash, then potentially could crystallise just under £876,722, of Scheme C. Then could take all of scheme B as tax-free cash, as specific tax free cash protection not subject to usual PCLS restrictions, provided there is at least £1 of an individuals lump sum allowance remaining following crystallisation of Scheme C. (and it wouldn't matter if did this all post or pre 6 April 2024?)

What do you guys think?


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