Stand alone lump sum & MPAA
smith
Member
Morning all,
A nice easy one to break you into the new week...
Client has (we think) a stand alone lump sum, though Standard Life will not calculate this until next year when the client turns 55.
The tax free element will be capped at the 05/04/23 value, with anything on top being taxable.
Will the payment (tax free & taxable) trigger the MPAA? I have found 1 reference saying no, but just wanted to see if anyone had any thoughts. An explanation as to why would be handy too...
Thanks
Comments
M&G website: "Where a person has Primary Protection with protected lump sum rights i.e. lump sum rights in excess of £375,000 at 5 April 2006, the MPAA will apply if they are paid a standalone lump sum." Source: https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/annual-allowance/money-purchase-annual-allowance#mpaa-triggers
Thanks Sean. It was the M&G tech article on SALS where I got the reference that the MPAA is not lost and had clicked through to the link above.
I was also trying to get the reasoning behind it, but it potentially makes sense that the MPAA is not triggered as you are forced into taking the full amount, so do not benefit from flexible access.
Basically if it's not on the list of MPAA triggers it's not a trigger. And SALS only make the list in conjunction with primary protection.