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DB Pension Tax Free Pension Commencement Lump Sum
MetaPhysical
Posts: 576 Forumite
I have a deferred DB pension where I can take a £100k PCLS. If I did take this £100k, would that take £100k off of what is the current £268K lifetime allowance and so leave me with £168K for use in UFPLS on my DC ????
Thankyou.
Thankyou.
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Comments
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Thought the LTA was being dropped?I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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The lifetime allowance has been abolished (for now!) but the tax free limit of £268k was retained. And yes, my understanding is that the 100k would use some of it up. I’m in a similar position for my AVCs which I can take as tax freeBrie said:Thought the LTA was being dropped?0 -
Yes - you currently have an LSA (lump sum allowance) of £268,275 unless you have applied for any transitional
protection. Your £100,000 will be deducted from this.
I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.0 -
My bad, maybe I didn't explain myself properly. I don't mean "the" old LTA. I mean the lifetime allowance of tax free cash which is capped at £268k now (1/4 of the old LTA). Does the defined benefit PCLS count toward that tax free cash allowance???0
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Yes, it counts towards it. Only small pot tax free cash doesn’t.MetaPhysical said:My bad, maybe I didn't explain myself properly. I don't mean "the" old LTA. I mean the lifetime allowance of tax free cash which is capped at £268k now (1/4 of the old LTA). Does the defined benefit PCLS count toward that tax free cash allowance???0 -
Thanks all.
So to continue the example. I could take £100k of tax free cash from my DB pension and, if I wanted, I could take £68k from my DC pot to leave me with £100k "remainder" which I could then use up in UFPLS withdrawals on the DC over a number of years????? I can slice and dice this however I see fit, up to the limit of £268k (as of now, understood it may reduce possibly) ?????0 -
I think so, that’s what I plan to doMetaPhysical said:Thanks all.
So to continue the example. I could take £100k of tax free cash from my DB pension and, if I wanted, I could take £68k from my DC pot to leave me with £100k "remainder" which I could then use up in UFPLS withdrawals on the DC over a number of years????? I can slice and dice this however I see fit, up to the limit of £268k (as of now, understood it may reduce possibly) ?????0
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