Transition Arrangements for PCLS following abolition of LTA in April

zagfles

FIREDreamer said:

zagfles said:

FIREDreamer said:

peterg1965 said:

FIREDreamer said:

peterg1965 said:

That’s great thank you and a bit of a relief to be honest.  I was about to start the process of taking a further PCLS, in complete ignorance, so thankful I stumbled across this post!  I just thought it would be done on actual monetary figures, not %s - silly me!

Do you know what form I need to complete and assume it goes to HMRC?

The amount on the transitional certificate is a monetary amount. As stated above once you get one you cannot change your mind.

I can’t see why I wouldn’t do this as it’s the difference between £29k (not good) and £95k (good) If the information i provide is correct why would it be something that I wouldn’t do, acknowledging that once issued it cannot be reversed?

Absolutely no idea - maybe some odd cases. 

If you crystallised when the LTA was higher eg at £1.8 million you could have got far more tax free cash than the default transitional calculation assumes. So applying for a TTFA could reduce tax free cash available. 

I crystallised my pensions when the LTA was £1.05m and £1.073m. Some DB was taken with no tax free cash. No LTA left. With no certificate I have no tax free cash available.

I have received a revised certificate today and the numbers in it look like they were calculated by Diane Abbott and are clearly wrong.

Rounding the figures here for privacy. I have already taken tax free cash of £245,000 and have no LTA left. My “corrected” certificate states …

Lump sum transitional tax-free amount: £245,000.00
Lump sum and death benefit transitional tax-free amount: £245,000.00



🤣🤣🤣

Its obvious what the error this time is. The former should be deducted from £268,275 (to give £23,275) and the latter deducted from £1,073,100 (to give £828,100).

No apology for the previous error which seems to be just £90 too high on the first transitional tax free cash figure and presumably the same on the death benefit figure. No confirmation from them of what the error was either. The £90 error is based on me calculating the correct figure myself.

I don’t think there is an excuse for producing figures on the certificate that are clearly garbage. Complaint raised.

I think it's right. See:
PTM174300 - Lump sum allowance and lump sum and death benefit allowance: Transitional rules for the tax year 2024-25: Transitional tax-free amount certificates - HMRC internal manual - GOV.UK (www.gov.uk)
It seems HMRC define "Lump sum transitional tax-free amount" etc as the amount used rather than remaining. 

FIREDreamer

zagfles said:

FIREDreamer said:

zagfles said:

FIREDreamer said:

peterg1965 said:

FIREDreamer said:

peterg1965 said:

That’s great thank you and a bit of a relief to be honest.  I was about to start the process of taking a further PCLS, in complete ignorance, so thankful I stumbled across this post!  I just thought it would be done on actual monetary figures, not %s - silly me!

Do you know what form I need to complete and assume it goes to HMRC?

The amount on the transitional certificate is a monetary amount. As stated above once you get one you cannot change your mind.

I can’t see why I wouldn’t do this as it’s the difference between £29k (not good) and £95k (good) If the information i provide is correct why would it be something that I wouldn’t do, acknowledging that once issued it cannot be reversed?

Absolutely no idea - maybe some odd cases. 

If you crystallised when the LTA was higher eg at £1.8 million you could have got far more tax free cash than the default transitional calculation assumes. So applying for a TTFA could reduce tax free cash available. 

I crystallised my pensions when the LTA was £1.05m and £1.073m. Some DB was taken with no tax free cash. No LTA left. With no certificate I have no tax free cash available.

I have received a revised certificate today and the numbers in it look like they were calculated by Diane Abbott and are clearly wrong.

Rounding the figures here for privacy. I have already taken tax free cash of £245,000 and have no LTA left. My “corrected” certificate states …

Lump sum transitional tax-free amount: £245,000.00
Lump sum and death benefit transitional tax-free amount: £245,000.00



🤣🤣🤣

Its obvious what the error this time is. The former should be deducted from £268,275 (to give £23,275) and the latter deducted from £1,073,100 (to give £828,100).

No apology for the previous error which seems to be just £90 too high on the first transitional tax free cash figure and presumably the same on the death benefit figure. No confirmation from them of what the error was either. The £90 error is based on me calculating the correct figure myself.

I don’t think there is an excuse for producing figures on the certificate that are clearly garbage. Complaint raised.

I think it's right. See:
PTM174300 - Lump sum allowance and lump sum and death benefit allowance: Transitional rules for the tax year 2024-25: Transitional tax-free amount certificates - HMRC internal manual - GOV.UK (www.gov.uk)
It seems HMRC define "Lump sum transitional tax-free amount" etc as the amount used rather than remaining. 

Thanks.

So it looks like this one is ok then and the last one was very wrong.

It isnt the definition i would logically expect though. 

The original certificate said …

Lump sum transitional tax-free amount: £23,275.00
Lump sum and death benefit transitional tax-free amount: £828,100

I calculated my Lump sum transitional tax-free amount to be £90 lower as they had transposed the hundreds and tens digits and i assumed this was the error. (I know this doesnt happen with these figures because i am showing rounded figures here). They just told me there was an error but didnt tell me what so it was easy to see why i thought the revised figures were nonsense.

Live and learn i suppose.

Now, if I crystallise any more with tax free do i get issued with a new certificate each time?

Amount available would be more logical than amount used because the former tells you what you have left. With the latter you have to work out what you have left which may differ depending on protections.

jaypers

Received my certificate from Pru today. 

FIREDreamer

jaypers said:

Received my certificate from Pru today. 

@jaypers

Is the “Lump sum transitional tax-free amount” the amount of PCLS you have used up / taken so far or the amount of PCLS you have left?

RogerPensionGuy

The link below may be helpful on this thread.

***

https://www.youtube.com/watch?v=9x-VVt6xfCE

jaypers

FIREDreamer said:

jaypers said:

Received my certificate from Pru today. 

@jaypers

Is the “Lump sum transitional tax-free amount” the amount of PCLS you have used up / taken so far or the amount of PCLS you have left?

Lump Sum Transitional Tax-Free Amount £257,500.00
Lump Sum and Death Benefit Transitional Tax-Free Amount £257,500.00

Doesn’t state what’s left, however in the letter is states “We have also updated our records to reflect your revised allowances.”

Back to my IFA now.

FIREDreamer

Thanks

Yes my revised one from Hargreaves shows lump sums used. Lump sums available would make more sense, but it shows what it is supposed to anyway. Lump sums available is what my original certificate said but Hargreaves cancelled it saying it was wrong but didn’t tell me why which was confusing.

I wonder if you get a new certificate every time you crystallise some pension and take tax free cash?

RogerPensionGuy

FIREDreamer said:

Thanks

Yes my revised one from Hargreaves shows lump sums used. Lump sums available would make more sense, but it shows what it is supposed to anyway. Lump sums available is what my original certificate said but Hargreaves cancelled it saying it was wrong but didn’t tell me why which was confusing.

I wonder if you get a new certificate every time you crystallise some pension and take tax free cash?

Lump sums used is real data that occurred.

Lump sum available is the above using a real data that actually occurred against an LTA figure at a date and the LTA figure of say 1.073M that will probably move. 

So maybe saying X % of LTA/1.073M and the actual X £s drawn tax free is what they could do.

I just took some DB TFLS and they send me a certified letter that I used withdrew X £s amount on a date in time.

I wonder how long before they tinker again with pensions. 

FIREDreamer

RogerPensionGuy said:

FIREDreamer said:

Thanks

Yes my revised one from Hargreaves shows lump sums used. Lump sums available would make more sense, but it shows what it is supposed to anyway. Lump sums available is what my original certificate said but Hargreaves cancelled it saying it was wrong but didn’t tell me why which was confusing.

I wonder if you get a new certificate every time you crystallise some pension and take tax free cash?

I wonder how long before they tinker again with pensions. 

When’s the next election.? 🤣🤣🤣

peterg1965

I received my TTFAC from InvestAcc on Friday. It clearly states the "lump Sum Transitional Tax-Free Amount" at the precise figure that I worked out myself.