LTA & The Grim Reaper

Doglegger

Was hoping to possibly avoid one of these but yesterday has seen to that. With regards to both though, have jumped on all LTA related posts but never seen this question put before which makes me think I may be off the mark somewhat.
If I were to crystalise to 100% of LTA and were unfortunate enough to die before 75, would I beat the tax man and my dependants benefit from me not having crystalised the remainder over LTA and paid no penalty on it?
If that's a possiblity is anybody thinking of doing it? If it is are their any major pitfalls in doing it apart from the known issues of BCE at 75?

Doglegger

Thinking of not crystalising that is....not deliberately dying before 75! 

zagfles

There is a BCE on uncrystallised funds on death under 75, but it can be avoided if your beneficiaries wait 2 years before designating the funds to drawdown. But the catch is the income is then taxable (normally is tax free on death under 75).

So the beneficiaries have the choice, pay the LTA charge and draw the pot tax free, or wait 2 years, avoid the LTA charge, but pay income tax on the drawdown.

So the best option will depend on the tax status of the beneficiary and whether they're happy to wait 2 years for the money.