Enhanced Protection Lump Sum

andy6247

I have an HMRC enhanced protection certificate valid from 6 April 2006. So far I have not drawn anything at all but am know considering taking the lump sum entitlement.. With the enhanced protection is the lump sum protected or restricted to the current standard Lump Sum Allowance cap of £268,275.  The pot is approx £1,816,773

JoeCrystal

Here: https://www.gov.uk/guidance/taking-higher-tax-free-lump-sums-with-lifetime-allowance-protection

poseidon1

andy6247 said:

I have an HMRC enhanced protection certificate valid from 6 April 2006. So far I have not drawn anything at all but am know considering taking the lump sum entitlement.. With the enhanced protection is the lump sum protected or restricted to the current standard Lump Sum Allowance cap of £268,275.  The pot is approx £1,816,773

Firstly congratulations on being one of the few individuals who implemented 'A' day protection of their pension benefits.

That said, there maybe some complexity with regard to your lump sum allowance as set out in the technical briefing note below - 

https://adviser.royallondon.com/technical-central/pensions/benefit-options/protecting-pre-6-april-2006-benefits/#:~:text=than £375,000-,Enhanced protection and primary protection — protected lump sum rights of,arrangement on 5 April 2023.

From what I can determine from the above, your rights may depend on whether your pension pot had already  accrued a lump sum entitlement more or less than  £375k as at 5 April 2006.

If lump protection in excess of  £375k is in point, see below HMRC technical guidance thereon -

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm176320

It seems your starting point should be what ( if anything ) is actually stated on your certificate.

 If this is not clear then you should seek clarification from your pension provider and/ or HMRC since it is clear this is not a 'one size fits all' situation. So even supposing there are forum contributors holding a certicate, their circumstances likely differ from your own in terms of how their lump sums maybe arrived at, given all the changes to the regime over the years.

poseidon1

I now see from your previous posts that you are already age 77, so discussion of how much TFC you can access may now be academic if your particular scheme has an age 75 limit - see guidance below

https://techzone.aberdeenadviser.com/public/pensions/Tech-guide-tax-free-cash#:~:text=Tax-free cash is available,taken after reaching age 75.

Since I now see you wish to benefit your sons ( sooner rather than later), can I suggest you cease floating different 'what if' scenarios on this forum and seek specific professional advice for your circumstances.

As a matter  of urgency , establish whether you can still access TFC at your present age, and if you can,  obtain advice on exactly how much. 

With your SIPP destained to be subject to IHT by April 2027, time is rapidly  running out for you to access an optimum amount for your son's benefit.

Suggest you find a Chartered Accountancy firm that can give you holistic SIPP planning,  IHT mitigation and general tax planning advice, since you cannot get that here.