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Pension Protection

Type of protection Start date Application deadline Qualifying criteria LTA protection & excess LTA tax charge Benefit accrual test BCE events Registered Tax Free Cash (TFC) Not registered TFC Other protections can have with Other protections cannot have with
Enhanced Protection 06/04/2006 3 years (5/4/09) Any amount allowed at 5/4/06 no excess if don’t break rules of EP must stop all DC contribs. DB contribs cannot exceed max limit If protection is maintained within appropriate limit test there is none Option to register TFC at % TFC available at A-day. This carries through as a % 25% of £1.5M if protection maintained PP IP14 IP16 FP12 FP14 FP16
Fixed Protection 12 06/04/2012 05/04/2012 LTA £1.8M, no qualifying criteria to apply, but qualifying conditions to maintain Excess LTA tax charge above £1.8M, 55% on Lump Sum at no point can the Capital value increase by more than the Relevant Percentage Calculate % of SLA used (post 2012 use £1.8M) at each BCE and deduct % from £1.8M to give remaining LTA % N/A 25% of £1.8M IP14 IP16 PP EP FP14 FP16
Fixed Protection 14 06/04/2014 05/04/2014 LTA £1.5M, no qualifying criteria to apply, but qualifying conditions to maintain Excess LTA tax charge above £1.5mn, 55% on Lump Sum at no point can the Capital value increase by more than the Relevant Percentage Calculate % of SLA used at each BCE and deduct % from £1.5M to give remaining LTA % N/A 25% of £1.5M  P14 IP16 PP EP FP12 FP16
Fixed Protection 16 06/04/2016 Starts July 2016 LTA £1.25M, no qualifying criteria to apply, but qualifying conditions to maintain Excess LTA tax charge above £1.25mn,  55% on LS at no point can the Capital value increase by more than the Relevant Percentage Calculate % of SLA used at each BCE and deduct % from £1.25M to give remaining LTA %. N/A 25% of £1.25M IP14 IP16 PP EP FP12 FP14
Primary Protection 06/04/2016 3 years (05/04/2009) Pension benefits more than £1.5M at A-day Enhancement to LTA expressed as a multiplier of SLTA (called the PP factor) Can accrue benefits but if personal LTA exceeded, LTA charge will apply at 55% taken on a LS or25% taken as Income Always shown as £ never % Before 2012 revalue BCE (x £1.5M/SLA at BCE), After 2012, its just amount of BCE, no revaluation Option to register TFC available at A- day and it is stated as a £number, revalued until 2012 x 1.8/1.5 or 1.8/SLA 25% of £1.5M (even with primary protection in place) EP FP12 FP14 FP16 IP14
Individual Protection 14 06/04/2014 3 years 05/04/2017 Pension benefits were between £1.25M and £1.5M on 5/04/14 Individual LTA (IP number) between £1.25mn and £1.5mn Can accrue benefits but if individual LTA (IP number) is exceed LTA charges will apply Calculate % of SLA used at each BCE and deduct % from IP N/A 25% of IP Number EP FP12 FP14 FP16 PP IP16
Individual Protection 16 06/04/2016 (05/04/2019?)not specified yet but likely 3 years Pension benefits were between £1M and £1.25M on 5/04/16 Individual LTA (IP number) between £1mn and £1.25mn Can accrue benefits but if individual LTA (IP number) is exceed LTA charge will apply Calculate % of SLA used at each BCE and deduct % from IP number to give remaining % N/A 25% of IP Number EP FP12 FP14 FP16 PP IP14