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Enhanced Protection, Protected Tax Free Cash & LSA

Sam_TSam_T Member
in Technical stuff

Hi - I have posted this on the M&G Tech Matters chat too, so apologies if you are reading this twice.

We have client aged 76, who has recently transferred uncrystallised funds to a new SIPP provider. We are now trying to get them to pay out tax free cash.

Client has Enhanced Protection with 25% Protected Tax Free Cash. He crystallised funds in 2014, but has not taken any tax free cash since then. My understanding is as follows:

  • TTFAC does not apply
  • His LSA will be 25% of the value of the funds being crystallised, as at 5 April 2023
  • As he is over 75 the LSDBA is irrelevant

Problem: the SIPP provider will not pay out his tax free cash until they have April 2024 values (we have given them the April 2023 values) - I can't understand why? They tell me they need to check what LSDBA the client will have left, but I don't see this is relevant as the client is now over 75.

The client is getting super frustrated and really needs his money.

Am I missing something?

Thanks

Sam

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