LTA and DB
Nathan
Member
Hi All
If a client has a DB scheme which is in deferrment, would any increase in deferral count as an actual and therefore void fixed protection?
Also, can you reduce the amount of LTA used by taking tax-free cash and income rather than 100% income. E.g. Full income = £47k a year = £940,000 LTA whereas reduced income is £37,000 with TFC of £184,000 = £924,000.
Thanks
Nathan
If a client has a DB scheme which is in deferrment, would any increase in deferral count as an actual and therefore void fixed protection?
Also, can you reduce the amount of LTA used by taking tax-free cash and income rather than 100% income. E.g. Full income = £47k a year = £940,000 LTA whereas reduced income is £37,000 with TFC of £184,000 = £924,000.
Thanks
Nathan
Comments
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
This is an option to reduce the LTA, particularly if the client wants a higher lump sum, but often the commutation factors used can be quite poor. There is a LTA saving but in the longer term the client may be worse off than taking a LTA hit - as with all things it depends on the situation I suppose!
All you could ever want to know and more can be found here.
https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm053910