Stand-out Q – overseas pension…

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SAT, 24 MAR 2018

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question:

An individual accrued all their pension rights in a recognised overseas pension scheme, and did not benefit from UK tax relief, which they then transferred to a registered pension scheme on their return to the UK. The lifetime allowance enhancement factor (LTAEF) gives them a current personal lifetime allowance (LTA) of £2 million; what is the maximum pension commencement lump sum they can take if they have no other form of LTA protection?

Answer:

The individual would only be entitled to 25% of the crystallised amount, subject to a maximum of 25% of the standard lifetime allowance, i.e., 25% of £1.03m at present, or £257,500.

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