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DB Pension Tax Free Pension Commencement Lump Sum
MetaPhysical
Posts: 472 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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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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