UK Pension Benefits Changes, TTFAC, Part 2

Following on from UK Pension Benefits Changes, Post-April 2024, Part 1, we can look in more detail about whether one should apply for a Transitional Tax-Free Amount Certificate (TTFAC).

Perhaps the easiest way to demonstrate the options would be a summary below.*

I should point out that the assumption is that a pension investor has not taken a serious ill-health payment or that no death benefits have been paid out as a lump sum.

1. If you created any BCEs between 06/04/2006 and 5/04/2024, you cannot apply for a TTFAC.
2. If you created a Relevant BCE after 6/04/2024, you cannot apply for a TTFAC.  
3. If you have Primary Protection or Enhanced Protection with lump sum protection of greater than £375,000 then a TTFAC will not add any extra lump sum payment. 
4. If you took less than 25% of the LTA at the time, you can apply for a TTFAC.

These questions, in conjunction with the previous article may help you identify if you need advice about a TTFAC. 
 
More information can be found from HMRC’s website here.

If you have any questions about this or any other aspect of the current, ever-changing, UK pension rules, then please feel free to contact us at Aisa International, +420 222 361 850 or support@aisainternational.cz

*There could be additional circumstances where the investor would want to apply for a TTFAC. Applications to the pension scheme can be made post-death. No application can be made if there has been an RBCE.

Abbreviations Key

LSA – Lump Sum Allowance

LSDBA – Lump Sum and Death Benefit Allowance

PCLS – Pension Commencement Lump Sum

UFPLS – Uncrystallised Funds Pension Lump Sums

TTFAC – Transitional Tax-Free Amount Certificate

RBCE – Relevant Benefit Crystallisation Event

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