If you have Lifetime Allowance protection, your allowances may be higher or different. We work out a personal limit for you. We base this on your protection and (if it applies) any protected tax-free cash in your scheme.
If you have a Lifetime Allowance protection certificate and you have not sent it to us, please contact us.
We take off any pension benefits you have already used when we work out how much allowance you have left.
For benefits taken after the rule change, we use the actual tax-free cash you were paid.
For benefits taken before the rule change, we assume 25% of the value was paid tax-free. We use this for the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance.
For the Overseas Transfer Allowance, we take off 100% of the amount you transferred. If you took benefits as drawdown (where your pension stays invested and you take an income), we usually take off only 25%. So it is important to tell us if you used drawdown. If you transfer to an overseas pension scheme, you must send evidence that drawdown rules apply.
Example: if you used 40% of the standard Lifetime Allowance (£429,240) before the rule change, we would assume:
|
|
Lump Sum Allowance
|
Lump Sum and Death Benefits Allowance
|
Overseas transfer allowance
|
|
Current Allowances
|
£268,275
|
£1,073,100
|
£1,073,100
|
|
Less Lifetime Allowance used
|
-£107,310
|
-£107,310
|
-£429,240
|
|
Remaining allowance
|
£160,965
|
£965,790
|
£643,860
|
If you took less than 25% as tax-free cash, you may be able to apply for a transitional tax-free amount certificate. If you get one, we use the tax-free cash you actually took, not the 25% assumption.
If you think you could go over the allowances, you need to apply for the certificate before you take benefits again.
These changes will not affect most people. This guide helps you check if they might affect you.
