LTA rounding

Reluctantpensioner

The government rules for LTA describe two methods for calculating LTA crystallisation.
One records % LTA crystallised to two decimal places, rounded down.
The other is more complex and basically involves records with rational numbers.
These lead to different results. But what will actually be used by the revenue??? The rounded percentage is most beneficial to the pensioner.

Specifically, if each year I crystallize, say 1.009999999% of the LTA, am I going to "get caught" with an audit that changes the math later.

Brynsam

Probably, but with such a tiny difference it doesn't really matter - the tax charge isn't regressive.

ukdw

Interesting - Does that mean that using the rounding method you can potentially add up to £102.99 to your crystalisation amount without it affecting you LTA - and therefore making available up to an extra £25.74 tax free each time you crystallise - or a reduction in LTA percentage could potentially be achieved by as little as a £1 reduction in crystalisation amount?

Not a lot I know - but I suppose it could add up over the years - particularly for anyone planning monthly UFPLS drawdowns.