Decision tree - who should consider applying for a TTFAC?
23 April 2025
Key points
- The lifetime allowance (LTA) was abolished from 6 April 2024 and replaced by the lump sum allowance (LSA) and lump sum and death benefit allowance (LSDBA) – these limit the amount of tax-free lump sums available, during the member’s lifetime and on death.
- Where benefits were crystallised before this date, the default calculation of available LSA and LSDBA generally deducts 25% of the LTA usage.
- By applying for a transitional tax-free amount certificate (TTFAC), the actual tax-free lump sums paid can instead be deducted.
- For some, a TTFAC can produce higher available allowances. But care is needed because, for some, it could result in lower allowances.
- An application for a TTFAC cannot be made if any relevant lump sums have already been paid on or after 6 April 2024.
- Once an individual has a TTFAC, they cannot revoke it. It can only be cancelled by the scheme administrator if found to be incorrect.
Assumptions and limitations – The decision tree outcomes are based on a number of assumptions and are only illustrative. Aberdeen does not accept any responsibility for any loss caused by reliance on this decision tree. This does not constitute financial or other professional advice from Aberden. If you require tax or other professional advice you should consult a suitability qualified professional.