Minimise LTA tax following DB transfer

HappyHarry

For instance in this thread an IFA writes "Death is a BCE (benefit crystallisation event) and the LTA charge will apply at that point." which is wrong, a BCE doesn't occur until funds are crystallised from the deceased's pension and can even be avoided as I described above.,

Fair play - I was simplifying the situation so as not to add more confusion than necessary.

EdSwippet

goRt wrote: »

I understand the LTA rules differently - you have to commence drawdown on the crystalised element to keep it at or below the £927.5k as growth will impact at the next BCE (there's no way to avoid the whole SIPP test at age 75).
One is incentivised to withdraw from SIPP to keep below LTA.

Right. Crystallising at the LTA buys you up to 20 years of sidestepping the excess tax, but you indeed want to drawdown over that period to also avoid tangling with the age 75 BCE later.

EdSwippet

anselld wrote: »

One thing you have not mentioned is indexation of LTA. LTA is promised to grow with CPI from 2018 (if you can believe any gov promise on pensions) so by avoiding LTA tax on growth you are sacrificing any inflation-proofing of LTA.

The OP has FP2016, so an LTA currently of 1.25mm. It should be quite a while before inflation raises the standard LTA above that.