Transitional Tax-Free Cash
Nathan
Member
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.
Comments
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.
Thank you Les
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