My OH has a Money Purchase scheme and a COMPs account that we are going to transfer into a new SIPP. All accounts are in England. No lump sums are being taken from these accounts before transfer.
I have been studying the paperwork from the pension admin which gives a value and % against the LTA for both schemes. Reading the HMRC pension manual I can only find mention of a BCE for transferring to a QROPS.
Am I right in thinking that the transfer of cash from the existing schemes into a SIPP is not a BCE and will therefore not reduce his LTA? My OH will not be taking any income/lump sums from his SIPP for a few years.
He also has 2 defined benefit pensions that will pay from his 60th birthday which is later this year. I understand both of these and their pension commencement lump sums will be tested against his LTA, and will leave a lower figure to be used once he starts taking income or lump sums from his SIPP.
FelixC
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Money purchase scheme transfer to SIPP ?BCE
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Re: Money purchase scheme transfer to SIPP ?BCE
felixcanis wrote:My OH has a Money Purchase scheme and a COMPs account that we are going to transfer into a new SIPP. All accounts are in England. No lump sums are being taken from these accounts before transfer.
I have been studying the paperwork from the pension admin which gives a value and % against the LTA for both schemes. Reading the HMRC pension manual I can only find mention of a BCE for transferring to a QROPS.
Am I right in thinking that the transfer of cash from the existing schemes into a SIPP is not a BCE and will therefore not reduce his LTA? My OH will not be taking any income/lump sums from his SIPP for a few years.
He also has 2 defined benefit pensions that will pay from his 60th birthday which is later this year. I understand both of these and their pension commencement lump sums will be tested against his LTA, and will leave a lower figure to be used once he starts taking income or lump sums from his SIPP.
FelixC
Simply transferring a pension from one UK authorized pension scheme to another is not a BCE and has no effect on your LTA limit.
https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/transfer-pension-scheme
A transfer is not a Benefit Crystallisation Event (BCE) unless it is an overseas transfer (see article on transferring to a QROPS).
Taking the DB pensions (or any authorized pension for that matter) will result in a BCE and a test against the current LTA limit. A percentage of the LTA limit will be used up - When you come to take another pension the test will then be against the remaining percentage of the current LTA limit (this use of percentages copes with the fact that the LTA limit has changed over time and will likely change further in the future).
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Re: Money purchase scheme transfer to SIPP ?BCE
Many thanks for your reply.
At the moment I'm drowning in multiple pdfs that need completing for each of his two DB pensions and the 2 DC accounts. Each form seems to need the same info, but in slightly different boxes. One set requires certified copies of birth & marriage certificates, another wants a copy of his passport. They all want to know about other schemes and the amount of LTA left which we have to calculate. Just hope the admin gets everything sorted by the end of November when his DB pensions should go into payment.
Thanks again for the info you supplied.
FelixC
At the moment I'm drowning in multiple pdfs that need completing for each of his two DB pensions and the 2 DC accounts. Each form seems to need the same info, but in slightly different boxes. One set requires certified copies of birth & marriage certificates, another wants a copy of his passport. They all want to know about other schemes and the amount of LTA left which we have to calculate. Just hope the admin gets everything sorted by the end of November when his DB pensions should go into payment.
Thanks again for the info you supplied.
FelixC
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