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Article | Pensions Briefing

UK pensions headlines: June 2024

June 3, 2024

Our latest round-up of recent developments in UK pensions covers an update from HMRC on transitional tax-free amount certificates.
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HMRC on-line: whether to apply for a transitional tax-free amount certificate?

Dave Roberts, Kirsty Cotton | June 3, 2024

HMRC has published Newsletter 60, which includes a link to a "tool for members to check if they can apply for a transitional tax-free amount certificate [TTFAC] from their scheme". The link has also been added to an HMRC guidance note “Find out the rules about Individual Lump Sum Allowances". The aim of the tool is not only to determine whether members or legal personal representatives “can” apply, but also whether there might be a benefit in doing so. A TTFAC can enable members with larger value benefits to draw a higher tax-free lump sum as it adjusts a member’s lump sum allowance (LSA) and lump sum death benefit allowance (LSDBA) by the actual amount of any tax-free lump sums received under the previous, lifetime allowance (LTA), regime (where the payment constituted a benefit crystallisation event) rather than by the assumed amount under the standard transitional calculation. The output from the tool informs members either to “apply for a transitional tax-free amount certificate” offering (limited) guidance on how to do so or “you do not need to apply for a transitional tax-free amount certificate as it does not give you an additional tax-free amount”.

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