Interactive Investor

Transitional Tax-Free Amount Certificate (TTFAC)

Find out about your options if you have previously taken less than the 25% tax-free lump sums available to you.


The Lump Sum Allowance (LSA)

The LSA limits the tax-free lump sums you can take from pensions. Any lump sums you take over your allowance will be taxed at your marginal rate of income tax. 

The standard LSA is £268, 275 but may be different if you hold lifetime allowance protection.

The Lump Sum and Death Benefit Allowance (LSDBA)

The LSDBA limits tax-free lump sums you can take from pensions, as well as tax-free lump sums that can be paid to beneficiaries after your death. It doesn't apply to any benefits you moved into drawdown before 6 April 2024. Any lump sums over your allowance will be taxed at the recipient's marginal rate of income tax.

The standard LSDBA is £1,073, 100 but may be different if you hold lifetime allowance protection. 

Overseas Transfer Allowance (OTA)

The OTA limits the amount you can transfer to a qualifying recognised overseas pension scheme (QROPS) without tax charges applying. Any amount you transfer to a QROPS that exceeds your OTA will be subject to the Overseas Transfer Charge - a flat rate tax charge of 25%.

The standard OTA will be the same as your LSDBA.

You can find out more about these allowances here.

Pension benefits taken before 6 April 2024

If you have previously taken benefits from a pension before 6th April 2024, your new allowances will be reduced by 25% of the amount of the old Lifetime Allowance (LTA) you have already used.

New allowances reduced by:- %LTA used x £1,073,100 x 25%

For example, if you have previously used 10% of your LTA, your new allowances will be reduced by 10% x £1,073,100 x 25% = £26,827.50

Your new allowances would then be:

LSA = £241,447.50
LSDBA = £1,046,272.50
OTA =  £1,046,272.50

Please Note, if you have previously used 100% of your LTA, your new allowances will have all been reduced to zero.

If you have any form of Lifetime Allowance protection, you can substitute your protected Lifetime Allowance value into the above calculation.

This calculation assumes that when you used your LTA, you took 25% of the value of the pension(s) you accessed tax-free.

Changes to pension allowances 2024.

The Lifetime Allowance for Pensions (LTA) was abolished at the end of the 2023/24 tax year. Take a look at how you and your money might be affected.

What if I took less than 25% of my pension benefits tax free?

In most cases, 25% of pension benefits taken will be taken as a tax-free payment. However, if you didn't for example, because the rules of your pension scheme gave you less than 25%, or you chose to take less tax-free cash, you may be entitled to more tax-free cash now. If this is the case, you can apply for a Transitional Tax-Free  Amount Certificate (TTFAC), which will be used to recalculate your remaining allowances. 

Who can apply for a Transitional Tax-Free Amount Certificate (TTFAC)?

If you have already had a Relevant benefit Crystallisation Event (RBCE) on any pensions that you hold since 6 April 2024, you cannot apply for a TTFAC. RBCEs occur when you take a lump sum from any of your pensions and include Pension Commencement Lump Sums (PCLS), Uncrystallised Funds Pension Lump Sums (UFPLS) and Serious Ill Health Lump Sums. 

If you took pensions benefits from any pension you hold from 6 April 2006 to 5 April 2024 and took less than 25% as a tax-free lump sum, you can apply for a TTFAC. You can't apply if you only took benefits prior to 6 April 2006. 

You cannot apply for a TTFAC if you hold valid enhancement Lifetime Allowance protection with lump sum protection over £375,000.

If you are unsure whether you are eligible to apply for a TTFAC, HMRC have created a tool, which you can can use to check if you can apply for one. You can access the tool on HMRC's website at:

Should I apply for a Transitional Tax-Free Amount Certificate (TTFAC)?

We recommend that you discuss this with a regulated financial adviser, as once a certificate has been issued, it cannot be revoked, and it may result in a lower tax-free amount that is available to you.  

If you don't already have an FCA-regulated financial adviser, you can find one in your area at:

How do I apply for a Transitional Tax-Free Amount Certificate (TTFAC)?

You can only apply for one TTFAC. If you hold multiple pensions with different providers, you should only apply to one provider for a TTFAC. You can then show this certificate to each of your pension providers. You can apply to the scheme administrator of any pension scheme you're a member of, for a certificate. You'll need to supply them a complete record of the pension benefits you've taken from all your different pension providers, including proof that you didn't take your full 25% tax-free lump sum. For this reason, you may find it easier to apply to the scheme where you took less than 25% of your benefits as a tax-free lump sum.

If you would like interactive investor to provide a Transitional Tax-Free Amount Certificate, then please fill out a Transitional Tax-Free Amount Certificate Application form, which you can find here and return it to us. When you return the form, you will also need to provide us with copies of any Lifetime Allowance protection certificates that you have and Benefit Crystallisation Event (BCE) Statements, where you have previously taken pension benefits. We may also request further evidence from you to prove that you have not previously taken the full 25% tax-free lump sums, if we deem the evidence you provide is insufficient. 

FCA rules say that we must either refuse your application or issue your certificate within 3 months of your application. If possible, we will attempt to issue the certificate before this though. If your application is incomplete or you do not provide us with sufficient evidence, where requested, we will let you know that your application has been rejected and you will need to re-apply once you have all required information.

What should I do if I have any questions about applying for a Transitional Tax-Free Amount Certificate?

If you have any questions, please contact us by secure message. Simply login to your account at, select Account/Secure messages, and send us a secure message. 

How can Pension Wise help?

If you have a defined contribution pension scheme and are 50 or over, then you can access free, impartial guidance on your pension options by booking a face to face or telephone appointment with Pension Wise, a service from MoneyHelper

If you are under 50, you can still access free, impartial help and information about your pensions from MoneyHelper