Transitional Tax-Free Cash

Hi, I know we are all probably asking questions in the area as it is all so new. But I thought I would ask. We have a client with £1.3m on a platform and another pot with ReAssure, that has the possibility of having enhanced tax-free cash. Given that the Tax-free cash available (currently) from the normal pension, is higher than the £268,275, would the client still be eligible for the higher level of tax-free cash from the smaller scheme. I believe they would be? but wanted to see if anyone had any different thoughts.


  • Only if they take it when there is £1 of LSA available. They can get £268,274 from the big scheme then their full PTFC from the reassure - the reassure would need to be taken last.

  • NathanNathan Member

    Thank you Les

  • NathanNathan Member

    Hi @les_cameron, just to check then, if the ReAssure pension was for example able to pay out the whole scheme as tax-free cash, she could take £268,274 from the larger pension and then all of the tax-free cash from the ReAssure pension?

  • Yip.

    With SSPTFC there is a requirement to have available lump sum allowance (hence the £1 remaining) to pay it but once you are over that hurdle there is no tax free limit, you get the calculated amount.

  • Sorry to hijack the thread, but if a client has no LSA remaining, what happens with regards to accessing a scheme which has scheme-specific tax-free cash? How does the tax treatment of accessing the benefits work?

  • If they have no LSA remaining they are not getting any scheme specific protected tax free cash (or any tax free for that matter). All benefits will be taxable

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