Transitional Tax Free Amount Certificates

EnglishMohican

I have two DB pensions that I took some years ago. I maximised the ongoing benefit by taking no tax-free cash. Lets say the LTAs were 20% and 40%.

I am now considering taking  tax-free cash from a SIPP.  Even if the SIPP provider assumes that I did take lump sums from the DB Pensions, I can still take 25% of the value of the SIPP without breaching the Lump Sum Allowance but it is getting close. But that would be OK as I have no further pots of money to take  lump sums from. 

1. Is it worth getting a transitional tax free certificate - not because i need it now but just to cover future eventualities which can really only mean the government doing something unhelpful in the future. Does anybody else get one "just in case".

2. As I wrote this, it occurred to me that if I get a TTFC which should show a full allowance of £268,275, can I take that amount out of the SIPP (assuming there is at least that in there) because I have not already taken it out of my total pension provision. Sounds optimistic to me but here's hoping. (Edited to add that 268275 would be well over 25% of the SIPP value)

Marcon

EnglishMohican said:

I have two DB pensions that I took some years ago. I maximised the ongoing benefit by taking no tax-free cash. Lets say the LTAs were 20% and 40%.

I am now considering taking  tax-free cash from a SIPP.  Even if the SIPP provider assumes that I did take lump sums from the DB Pensions, I can still take 25% of the value of the SIPP without breaching the Lump Sum Allowance but it is getting close. But that would be OK as I have no further pots of money to take  lump sums from. 

1. Is it worth getting a transitional tax free certificate - not because i need it now but just to cover future eventualities which can really only mean the government doing something unhelpful in the future. Does anybody else get one "just in case".

2. As I wrote this, it occurred to me that if I get a TTFC which should show a full allowance of £268,275, can I take that amount out of the SIPP (assuming there is at least that in there) because I have not already taken it out of my total pension provision. Sounds optimistic to me but here's hoping. (Edited to add that 268275 would be well over 25% of the SIPP value)

1. No harm in doing so. Helpful reading: https://adviser.royallondon.com/technical-central/pensions/benefit-options/transitional-tax-free-amount-certificates/ (note that you need to apply for a certificate before you crystallise any benefits from April 2024 on)
2. No - afraid not! It's 25% of the SIPP value, subject to an overall limit of tax free cash from all your pensions.