TTFAC - Post 75 Crystallisation Event
Paraplanning831
Member
Hi all, if an individual is post 75 and has not accessed their pension benefits as yet, I am of the understanding that they only crystallisation event they will have gone through is the BCE 5B - Uncrystallised funds against the LTA. In previous rules then, this amount of LTA would have been utilised.
With the introduction of the LSA, would a TTFAC be required in this instance as no lump sum was ever received, or would the remaining LSA be the entire standard allowance of £268,275 regardless of applying for a certificate. Essentially does the LSA include BCE 5B as a previous lump sum against this allowance or is this event just exempt from the new allowance and so no action regarding the certificate required?
Comments
After recently learning about this, my understanding is that the BCE is still relevant, but there is a disregard applied.
The disregard is not as straight forward as just ignoring the event. Instead, you have to calculate it based on the standard calculation and the amount used at the event.
This article explains it much better than I can, so hopefully this helps:
https://www.linkedin.com/pulse/lump-sum-allowance-age-75-bces-disregard-dave-king-qusee/?trackingId=7FD1ZJ9GcKwZgLd/9RHUUw==
The ARIES thing is a good read. The issue described are possibly going to be fixed in the new regs at the start of next year.
As it stands (and how it should stand when the potential fix goes in) for your scenario is that as long as no lump sums have been paid between age 75 and April 24 the age 75 BCE is ignored so they will have full allowances.