Remaining LTA Calculation

[Mark66]

So far I have had two benefit crystallisation events:
1.55% - used by a UFPLS (£16,667 to use my Personal allowance in 20/21 tax year)
27.29% - used by starting my DB pension (£292,896.27 used June 2021)

So I think I have 100% - 1.55% - 27.29% = 71.16% of my LTA available.

My understanding from:
https://www.gov.uk/hmrc-internal-manual ... /ptm164400
is each BCE uses a percentage of the LTA available that year. This percentage is rounded down to 2 decimal places (i.e. the 1.55% and 27.29% from my previous BCE statements).

I applied to my SIPP provider to crystallise £763,617.96 (71.16% of £1,073,100) to take me up to 100% of the LTA.

My SIPP provider has queried my calculation as they say this would take me slightly over the LTA. They have said I have only £763,536.73 LTA remaining.
They have calculated this from the actual figures crystallised (£1,073,100.00 - £292,896.27 - £16,667.00 = £763,536.73), i.e. they have not considered the rounded percentages.

But I think if I put their calculated amount of £763,536.73 into drawdown this will be recorded as 71.15% of my LTA (rounded down to 2 decimal points) taking me to 99.99% in total.

Is my provider correct in the amount I should crystallise to use up my remaining LTA?

Bemused,
Mark.

[TedSwippet]

Is my provider correct in the amount I should crystallise to use up my remaining LTA?

I have always assumed, like you, that the percentages are rounded and then summed. Right up until I read this post and started looking more closely into things, in fact. However ... if you take a very close look indeed at PTM164400, it seems that your provider might be correct. Or at least, it is perhaps ambiguous whether or not the rounding applies to the addition of LTA percentages.

This document contains these two sentences, and importantly, shown in this order:

The total percentage of standard lifetime allowance used up in relation to a member is the sum of all the percentages calculated using the formula above for each relevant benefit crystallisation event in respect of the member.

The percentage expressed on the statement should go to two decimal places (i.e. 25.55%). This should be a rounded down figure, so 25.558% becomes 25.55%.

So, the rounding applies to the number printed on a statement, but not necessarily to the numbers summed to produce the total LTA percentage consumed. If there is another document that either clarifies or disagrees with this interpretation, it would be an interesting find. The legislation itself appears silent on rounding.

[Mark66]

So, the rounding applies to the number printed on a statement, but not necessarily to the numbers summed to produce the total LTA percentage consumed.

Well spotted TedSwippet, subtle, but reading carefully again those two sentences in PTM164400 I think you have hit the nail on the head.

Thank you,
Mark.