Stand-out Q – pension earmarking order…


FRI, 24 MAR 2017

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An individual has an earmarking order for 40% of their pension rights, and now wishes to take their benefits from the money purchase arrangement. What amount crystallised is tested against their lifetime allowance (LTA)?


The full amount crystallised is tested against the member’s LTA. The earmarking takes effect when the member takes their benefits, and income is taxed in hands of the member.

Earmarking ceases on the ex-spouse remarrying or on death of ex-spouse (unless a lump sum death benefit has been earmarked for the ex-spouse).

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