By Chris Lean, Chief Investment Officer, Aisa International
Following on from Part 1 we can look in more detail about whether one should apply for a UK TTFAC – Transitional Tax-Free Amount Certificate.
Perhaps the easiest way to demonstrate the options would be a summary below*.
I should point out that the assumption is that a pension investor has not taken a serious ill-health payment or that no death benefits have been paid out as a lump sum.
a) If you created any BCEs between 06/04/2006 and 5/04/2024, you cannot apply for a TTFAC.
b) If you created a Relevant BCE after 6/04/2024, you cannot apply for a TTFAC.
c) If you have Primary Protection or Enhanced Protection with lump sum protection of greater than £375,000 then a TTFAC will not add any extra lump sum payment.
d) If you took less than 25% of the LTA at the time, you can apply for a TTFAC.
These questions, in conjunction with the previous article, may help you identify if you need advice about a TTFAC.
More information can be found from HMRC’s website here.
Summary
If you have any questions about this or any other aspect of the current, ever-changing, UK pension rules then please feel free to contact us at Aisa International, +420 222 361 850 or support@aisainternational.cz.
*There could be additional circumstances where the investor would want to apply for a TTFAC. Applications to the pension scheme can be made post-death. No application can be made if there has been an RBCE.
Abbreviations Key
LSA – Lump Sum Allowance
LSDBA – Lump Sum and Death Benefit Allowance
PCLS – Pension Commencement Lump Sum
UFPLS – Uncrystallised Funds Pension Lump Sums
TTFAC – Transitional Tax-Free Amount Certificate
RBCE – Relevant Benefit Crystallisation Event