Flexi access drawdown - what is income and what is a Lump Sum

jamesd

hyperhypo said:

I always wondered how this mechanism works in practice and what folk do about it , but it hardly  applies to me.

Crystallising is what does it. Two much discussed options are UFPLS or take 25% tax free and put the 75% into flexi-access drawdown.

BPL

"
If already over the allowance you can either pay 55% and no income tax or 25% and using 0% tax free lump sum put 100% of the bit being crystallised into flexi-access drawdown."


This is only if you haven't drawn down any remaining TFLS before you exceed the LTA?

jamesd

Yes. It's solely discussing the already reached LTA case.

Technically when tax free is allowed you can select anything from 0% to 25% tax free.

BPL

jamesd said:

Yes. It's solely discussing the already reached LTA case.

Technically when tax free is allowed you can select anything from 0% to 25% tax free.

Can you have any Tax free when over LTA though? Or is this the lump sum that is at 55%

jamesd

Only using the small pots rule.

BPL

Can you notionally make small pots from a big one or do you have to transfer them to genuine smaller pots? I gather 3x£10k max.