Stand-out Q – protected tax free cash…


TUE, 18 NOV 2014

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An adviser called to say that a client has rights under a section 32 policy and the only way of taking income from it is via an annuity. The client also has scheme specific lump sum protection (entitlement to more than 25%) under the policy and that transferring to a SIPP would normally result in the protection being lost because the transfer would not be a block transfer. The reason for the client wanting to transfer to a SIPP is to access more options in the way that benefits can be drawn post 5 April 2015.

The relaxation in the definition of block transfer introduced in the Finance Act 2014 means that the client can transfer before 6 April 2015 and provided the rights under the SIPP are fully crystallised before 6 October 2015 the scheme specific lump sum protection will be retained under the SIPP.

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