25% tax free calculation - LTA or fund value?

CCCS

Hi Forum
Context is I am lucky to have a pension fund which may exceed the LTA cap prior to my retirement, so I'd like clarity on how the 25% tax free amount is calculated.
Is it on the fund value or the LTA cap value?
Many thanks

pip895

I believe you don't get the 25% tax free on any amount above the LTA so essentially its the latter..

CCCS

thanks 
Was confused as the Aviva pensions retirement tool seems to suggest it is based on the fund value..

pip895

You might find this helpful:-

Lifetime Allowance (LTA): Q&A (pruadviser.co.uk)

rpa_69

I stand to be corrected, but my understanding aligns with pips comments ... that the usual maximum TFLS is the lesser of 25% of the LTA or 25% of the fund value. On that basis, and using the current LTA, you can't realise more than 268,275, irrespective of fund size.

A significant amount !!

jamesd

It's up to 25% of the lifetime allowance value provided that your fund is worth at least that much. Fund value checked first, then you deal with the LTA that may cap the tax free amount.

ukdw

The maximum 25% PCLS is definitely based on the LTA limits (plus an extra £7.5k if the £30k small pots rule is used).

For some reason quite a few tools and calculators don't take LTA into account.

 I suspect that this is due to the historical relative rarity, complication and frequent changes to the LTA limits. I believe some providers (including it sounds like Aviva) handle some aspects of LTA manually, rather than having it properly programmed into their systems.

Pablo7474

Are you eligible for any LTA protection? 

CCCS

Hi. Unfortunately no LTA protection 😩