TTFAC Sample/Example Required

b1gmike

I applied for and obtained a TTFAC from my DB occupational pension scheme.  When I started taking my "work" pension I did not take a tax-free lump sum.

The TTFAC Certificate they supplied stated that I had a Lump Sum Allowance of £268,275.00 and Lump Sum and Death Benefit Allowance of  £ 1,073,100.00 which seemed correct as I took no tax-free money from my DB pension.  The certificate also contained an evidence table clearly indicating that the tax-free lump sum taken at commencement of that pension was 0.

I have a second small pension pot ("private" pension) with Scottish Widows from which I decided to take the 25% tax free amount.

When I asked to take the 25% tax-free sum they asked for my TTFAC which I sent to them.  They responded that it was invalid.  After much toing and froing I believe they are not expecting the TTFAC to state the tax-free allowances themselves but instead, state the amounts of those allowances already used.  They referred me to the HMRC manual and the two amounts described as Lump sum transitional tax-free amount and Lump sum and death benefit transitional tax-free amount.   They have said that they expect the TTFAC to cite these two figures and that based on the evidence provided on the "invalid" TTFAC (evidence showing that I have taken 0 tax-free cash to date) both these figures should be 0.

I fed this back to my DB pension provider who have effectively responded that the certificate they have provided is valid.

I am now stuck between the two.  I am wondering, given others who have TTFACs, what have their providers put on those certificates?  I am trying to figure out which of my two providers I need to battle with.

Dazed_and_C0nfused

Not seen one but this might be worth a read,

https://adviser.royallondon.com/technical-central/pensions/benefit-options/transitional-tax-free-amount-certificates/

Albermarle

I started my DB pension without taking a lump sum about 3 years ago.
I avoided contacting the administrator ( Mercer)  about the TTFCC, due to previous problems with slow/no responses.
Instead I asked my SIPP provider and they sent me some forms to fill in, which I sent off with some evidence that I had not taken any lump sum with my DB pension.
They sent me a TTFCC that said -
Total % of all previously used standard lifetime allowance - 26.02%
The amount of LSA already used prior to 6th April 2024 - £0
The amount of LSDBA already used prior to 6th April 2024 - £0

I have not presented this certificate to any other provider, so no feedback from other providers.

dunstonh

When I asked to take the 25% tax-free sum they asked for my TTFAC which I sent to them.  They responded that it was invalid.  After much toing and froing I believe they are not expecting the TTFAC to state the tax-free allowances themselves but instead, state the amounts of those allowances already used.

The TTFAC should have three boxes:

1)  Percentage of standard lifetime allowance previously used 
2) lump sum transitional tax free amount used (£)
3) lump sum and death benefit transitional tax free amount used (£)

Your DB scheme appears to be incorrect based on what you have said.  SW appear to be correct.

Tommyjw

The certificate is to specify the amount of cash taken. The transitional tax free amount is the amount used and therefore scottish widow's are correct that for yourself this would be £0. It would be 10,000 if you took a 10k lump sum for example, not the total allowance minus 10k.

Somebody

According to https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/benefit-limits/transitional-tax-free-amount-certificates#certificates

"There is no prescribed format for a certificate, it can be a standalone document or incorporated in any other document a scheme issues.

There is however prescribed in formation that must be issued. It must include the individual's:

• name, address and national insurance number

• lifetime allowance previously-used amount expressed as a percentage of the standard lifetime allowance

•  lump sum transitional tax free amount

•  lump sum and death benefit transitional tax free amount

Once a certificate is issued it cannot be amended or replaced."

This is mine:

 

FIREDreamer

dunstonh said:

When I asked to take the 25% tax-free sum they asked for my TTFAC which I sent to them.  They responded that it was invalid.  After much toing and froing I believe they are not expecting the TTFAC to state the tax-free allowances themselves but instead, state the amounts of those allowances already used.

The TTFAC should have three boxes:

1)  Percentage of standard lifetime allowance previously used 
2) lump sum transitional tax free amount used (£)
3) lump sum and death benefit transitional tax free amount used (£)

Your DB scheme appears to be incorrect based on what you have said.  SW appear to be correct.

Indeed. My first certificate supplied by Hargreaves Lansdown stated 2 and 3 remaining. A week later a corrected version with 2 and 3 actually used was supplied as a replacement. Counterintuitive really as amount remaining seems more logical. But with various protections maybe amount used is more practical.

Tommyjw

Indeed i can't remember how/where but it was a query right at the start and it got clarified somewhere. It was such a rush job that DB administrators had extremely little time to try and keep up, i wonder (hope?) if OP's DB firm are of the smaller size so just havent had to deal witha s many requests and had it sorted internally. Indeed i work on a team 'only' of about ~10,000 lives and personalyl we've only had 5 or 6 requests for one. 

b1gmike

Thank you everyone that has responded to my question.  I am convinced that SW are correct and my DB administrator and issuer of the certificate is wrong.  My DB administrator is a "challenger"; I really don't think they have any depth of knowledge and have had few requests for TTFACs.  I now need to convince them they are in the wrong.

Albermarle

Tommyjw said:

Indeed i can't remember how/where but it was a query right at the start and it got clarified somewhere. It was such a rush job that DB administrators had extremely little time to try and keep up, i wonder (hope?) if OP's DB firm are of the smaller size so just havent had to deal witha s many requests and had it sorted internally. Indeed i work on a team 'only' of about ~10,000 lives and personalyl we've only had 5 or 6 requests for one. 

The small number of requests is not surprising. I presume that most people who would benefit from having one, are totally unaware of it, especially if they do not have a financial advisor and/or are not a pensions geek.  Pension knowledge generally is poor, and this is quite a niche area.
I only really knew about it due to it being discussed on here. 

xylophone

My DB administrator is a "challenger"; I really don't think they have any depth of knowledge and have had few requests for TTFACs.  I now need to convince them they are in the wrong.

Write to the Administrators explaining that you are planning to access a private pension and that in order to comply with regulations, the provider requires  a TTFAC presented in the following format.

• name, address and national insurance number
• 
  
• previously-used amount of the lifetime allowance expressed as a percentage of the standard lifetime allowance
• 
  
•  lump sum transitional tax free amount
• 
  
•  lump sum and death benefit transitional tax free amount

Then request that they provide it.