Exceeded LTA no point crystallising the rest?

garmeg

Albermarle said:

So if, for example, the amount that went into drawdown was £400k, and any growth was 'used up' by the point of the annuity purchase, then the value would be zero.

What if the pot had shrunk to say £300K before buying the annuity ? Could you claim back a negative LTA contribution ?

I suspect not 

No you can't - and if things go worse than that with  a selection of Marconi's, British and Commonwealth, Maxwell Communications, Woodford etc it could be catastrophic and no opportunity to pay more in to recover without an LTA penalty at the other end.

cfw1994

garmeg said:

cfw1994 said:

Malthusian said:

@cfw1994 Not correct. A lifetime annuity purchase from drawdown funds triggers another BCE test, much like the age 75 test. Unless the member is over 75 or went into drawdown pre 2006. Ditto a scheme pension. See BCE 4.

Thanks for the links & correcting me - always learning 
There is the caveat of:

if the lifetime annuity is bought from income drawdown funds, the crystallised value is:

• the market value of the member's income drawdown fund, at the time the lifetime annuity is being bought, less
• the amount originally moved into income drawdown at the outset.

So if, for example, the amount that went into drawdown was £400k, and any growth was 'used up' by the point of the annuity purchase, then the value would be zero.
Best keep a close eye on this stuff, eh!!

What if you only use a portion of the fund to buy a lifetime annuity?

I assume the portion of LTA would be calculated.   Sounds like a mathematical nightmare!!    I guess the moral of this is to keep very good records.....

cfw1994

cfw1994 said:

garmeg said:

cfw1994 said:

Malthusian said:

@cfw1994 Not correct. A lifetime annuity purchase from drawdown funds triggers another BCE test, much like the age 75 test. Unless the member is over 75 or went into drawdown pre 2006. Ditto a scheme pension. See BCE 4.

Thanks for the links & correcting me - always learning 
There is the caveat of:

if the lifetime annuity is bought from income drawdown funds, the crystallised value is:

• the market value of the member's income drawdown fund, at the time the lifetime annuity is being bought, less
• the amount originally moved into income drawdown at the outset.

So if, for example, the amount that went into drawdown was £400k, and any growth was 'used up' by the point of the annuity purchase, then the value would be zero.
Best keep a close eye on this stuff, eh!!

What if you only use a portion of the fund to buy a lifetime annuity?

I assume the portion of LTA would be calculated.   Sounds like a mathematical nightmare!!    I guess the moral of this is to keep very good records.....

Just spotted your tagline of trainee IFA - what would YOU think would happen?

garmeg

cfw1994 said:

cfw1994 said:

garmeg said:

cfw1994 said:

Malthusian said:

@cfw1994 Not correct. A lifetime annuity purchase from drawdown funds triggers another BCE test, much like the age 75 test. Unless the member is over 75 or went into drawdown pre 2006. Ditto a scheme pension. See BCE 4.

Thanks for the links & correcting me - always learning 
There is the caveat of:

if the lifetime annuity is bought from income drawdown funds, the crystallised value is:

• the market value of the member's income drawdown fund, at the time the lifetime annuity is being bought, less
• the amount originally moved into income drawdown at the outset.

So if, for example, the amount that went into drawdown was £400k, and any growth was 'used up' by the point of the annuity purchase, then the value would be zero.
Best keep a close eye on this stuff, eh!!

What if you only use a portion of the fund to buy a lifetime annuity?

I assume the portion of LTA would be calculated.   Sounds like a mathematical nightmare!!    I guess the moral of this is to keep very good records.....

Just spotted your tagline of trainee IFA - what would YOU think would happen?

No idea, I have only just started!

Not enjoying it very much either, truth be told.

cfw1994

Ahh, sorry to hear that.  I feel that many on these boards are pretty knowledgable and good at sharing, but there are a HUGE number of less interested folk out there who do need help.   Not sure what size or style of firm you are at....might message you some thoughts....

garmeg

cfw1994 said:

Ahh, sorry to hear that.  I feel that many on these boards are pretty knowledgable and good at sharing, but there are a HUGE number of less interested folk out there who do need help.   Not sure what size or style of firm you are at....might message you some thoughts....

I think my knowledge of financial stuff is good but there are a few gaps that the information i get here is able to fill. This is a very good forum.