PTM174700 - Lump sum allowance and lump sum and death benefit allowance: Transitional rules for the tax year 2024-25: Fixed protection
Source: gov.uk (2025-11-11)


As of 6 April 2024 there is no longer lifetime allowance. If you are looking for information about protections, enhancement factors and the lifetime allowance charge please see these pages on The National Archives (https://webarchive.nationalarchives.gov.uk/ukgwa/20240305022829/https:/www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm090000). If you are looking for information about the principles of lifetime allowance and benefit crystallisation events please see these pages of The National Archives (https://webarchive.nationalarchives.gov.uk/ukgwa/20240305022836/https:/www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm080000).

Fixed protection 2012 (FP12) (#FP12) Fixed protection 2014 (FP14) (#FP14) Fixed protection 2016 (FP16) (#FP16)

Fixed protection 2012 (FP12)

Paragraph 14 Schedule 18 Finance Act 2011 Individuals who had pension savings in excess of £1,500,000 but less than £1,800,000 could apply to HMRC for protection from the lifetime allowance charge when those rights came into payment after 5 April 2012. Anyone who did not have primary protection or enhanced protection could have applied apply for fixed protection 2012. As of 6 April 2024, the lifetime allowance charge has been abolished, but an individual is entitled to have their lump sum allowance (see PTM171000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm171000)) and lump sum and death benefit allowance (see PTM172000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm172000)) protected. Individuals with FP12 that have had benefit crystallisation events (BCEs) prior to 6 April 2024 will need to consider the below information to calculate their lump sum and lump sum death benefit allowance availability prior to their first relevant benefit crystallisation event. These transitional rules apply from the 2024-25 tax year.

Lump sum and death benefit allowance availability

Paragraph 126 Schedule 9 Finance Act 2024 For an individual with FP12, their lump sum and death benefit allowance (LSDBA) will be £1,800,000 and they will be subject to the transitional lump sum and death benefit allowance calculations (see PTM174200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174200)). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amount certificate from their certification administrator, see PTM174300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174300).

Example

Raf has a relevant benefit crystallisation event on 28 November 2026. He receives an uncrystallised funds pension lump sum (UFPLS) of £50,000. To calculate his available lump sum and death benefit allowance, he must first deduct any benefit crystallisation events (BCEs) that occurred prior to the 6 April 2024. Raf has valid FP12. Raf does not have a transitional tax-free amount certificate. Raf’s lifetime allowance previously-used amount is £490,000. 25% of this figure (£122,500) is deducted from his lump sum and death benefit allowance. As Raf has valid FP12, this is fixed at £1,800,000. £1,800,000 - £122,500 = £1,677,500 Therefore, Raf’s available lump sum and death benefit allowance at 6 April 2024 is £1,677,500. The amount of the relevant benefit crystallisation event occurring on 28 November 2026 then needs to be deducted from this figure. £1,677,500 – £50,000 = £1,627,500 Raf’s lump sum and death benefit allowance at 28 November 2026 is £1,627,500.

Lump sum allowance availability

Paragraph 125 Schedule 9 Finance Act 2024 For an individual with FP12, their lump sum allowance will be £450,000 and they will be subject to the transitional lump sum allowance calculations (see PTM174100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174100)). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amount certificate from their certification administrator, see PTM174300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174300).

Example

Continuing with the example of Raf above.

Raf receives an UFPLS of £50,000 on 28 November 2026. He has FP12 and his lifetime allowance previously-used amount is £490,000.

25% of this figure of (£122,500) is then deducted from the his lump sum allowance. As Raf has FP12 his lump sum allowance will be £450,000.

£450,000 - £122,500 = £327,500

Therefore, Raf’s available lump sum allowance at 6 April 2024 is £327,500.

The tax-free element of the relevant benefit crystallisation event occurring on 28 November 2026 then needs to be deducted from this figure.

25% of £50,000 = £12,500

£327,500 - £12,500 = £315,000

Raf’s lump sum allowance at the 28 November 2026 is £315,000.

Fixed protection 2014 (FP14)

Paragraph 1 Schedule 22 Finance Act 2013 Individuals who had pension savings in excess of £1,250,000 but less than £1,500,000 could apply to HMRC to protect them for protection from the lifetime allowance charge when those rights came into payment after 5 April 2014. Anyone who did not have FP12, primary protection or enhanced protection could apply for FP14. As of 6 April 2024, the lifetime allowance charge has been abolished, but an individual is entitled to have their lump sum allowance (see PTM171000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm171000)) and lump sum and death benefit allowance (see PTM172000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm172000)) protected. Individuals with FP14 that have had benefit crystallisation events prior to 6 April 2024 will need to consider the below information to calculate their lump sum and lump sum death benefit allowance availability prior to their first relevant benefit crystallisation event.

Lump sum and death benefit allowance availability

Paragraph 126 Schedule 9 Finance Act 2024 For an individual with FP14, their lump sum and death benefit allowance will be £1,500,000 and they will be subject to the transitional lump sum and death benefit allowance calculations (see PTM174200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174200)). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amount certificate from their certification administrator, see PTM174300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174300).

Example

Michelle has a relevant benefit crystallisation event on 19 October 2024. She receives a pension commencement lump sum (PCLS) of £80,000. To work out her available lump sum and death benefit allowance, she must first deduct a percentage of the value of any benefit crystallisation events (BCEs) that occurred prior 6 April 2024.

Michelle has valid FP14.

Michelle does not have a transitional tax-free amount certificate.

Michelle’s lifetime allowance previously-used amount is £600,000.

25% of this figure (£150,000) is deducted from her lump sum and death benefit allowance. As Michelle has FP14, this is fixed at £1,500,000.

£1,500,000 - £150,000 = £1,350,000

Michelle’s available lump sum and death benefit allowance at 6 April 2024 is £1,350,000. Therefore Michelle’s lump sum and death benefit allowance is sufficient for her to receive the tax-free PCLS of £80,000.

The amount of the relevant benefit crystallisation event occurring on 19 October 2024 then needs to be deducted from this figure.

£1,350,000 – £80,000 = £1,270,000

Michelle’s lump sum death benefit allowance at 19 October 2024 is £1,270,000.

Lump sum allowance availability

Paragraph 125 Schedule 9 Finance Act 2024 For an individual with FP14, their lump sum allowance will be £375,000 and they will be subject to the transitional lump sum allowance calculations (see PTM174100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174100)). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amount certificate from their certification administrator, see PTM174300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174300).

Example

Continuing with the example of Michelle above.

Michelle receives a PCLS of £80,000 on 19 October 2024. She has FP14 and her lifetime allowance previously-used amount is £600,000.

25% of this figure of (£150,000) is deducted from the her lump sum allowance. As Michelle has FP14 her lump sum allowance will be fixed at £375,000.

£375,000 - £150,000 = £225,000

Michelle’s available lump sum allowance at 6 April 2024 is £225,000. Therefore, Michelle’s lump sum allowance is sufficient for her to receive the tax-free PCLS of £80,000.

The amount of the relevant benefit crystallisation event occurring on 19 October 2024 needs to be deducted from this figure.

£225,000 - £80,000 = £145,000

Michelle’s lump sum allowance at 19 October 2024 is £145,000.

Fixed protection 2016 (FP16)

Paragraph 1 Schedule 4 Finance Act 2016 Individuals who had pension savings in excess of £1,000,000 but less than £1,250,000 could apply to HMRC for protection from the lifetime allowance charge when those rights come in payment after 5 April 2016. Anyone who did not have FP12, FP14, primary protection or enhanced protection could apply for FP16. As of 6 April 2024, the lifetime allowance charge has been abolished, but an individual is entitled to have their lump sum allowance (see PTM171000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm171000)) and lump sum and death benefit allowance (see PTM172000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm172000)) protected. Individuals with FP16 that have had benefit crystallisation events prior to 6 April 2024 will need to consider the below information to calculate their lump sum and lump sum death benefit allowance availability prior to their first relevant benefit crystallisation event.

Lump sum and death benefit allowance availability

Paragraph 126 Schedule 9 Finance Act 2024 For an individual with FP16, the lump sum and death benefit allowance will be £1,250,000 and they will be subject to the transitional lump sum and death benefit allowance calculations (see PTM174200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174200)). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amount certificate from their certification administrator, see PTM174300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174300).

Example

Charlie dies, aged 71, on 1 March 2027. A relevant benefit crystallisation event occurs on 28 April 2027 as Charlie’s nominee is paid £250,000 as an uncrystallised funds pension lump sum death benefit.

He held valid FP16.

Charlie does not have a transitional tax-free amount certificate.

Charlie’s lifetime allowance previously-used amount is £700,000.

25% of this figure (£175,000) is deducted from his lump sum and death benefit allowance. As Charlie has FP16, this is fixed at £1,250,000.

£1,250,000 - £175,000 = £1,075,000

Therefore, Charlie’s available lump sum and death benefit allowance at 6 April 2024 is £1,075,000.

The amount of the relevant benefit crystallisation event occurring on 28 April 2027 then needs to be deducted from this figure.

£1,075,000 – £250,000 = £825,000

As of 28 April 2027, Charlie has £825,000 lump sum and death benefit allowance remaining.

Lump sum allowance availability

Paragraph 125 Schedule 9 Finance Act 2024 For an individual with FP16, the lump sum allowance will be £312,500 and they will be subject to the transitional lump sum allowance calculations (see PTM174100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174100)). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amount certificate from their certification administrator, see PTM174300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174300).

Example

Alison has a relevant benefit crystallisation event on 22 March 2028. She receives a pension commencement lump sum (PCLS) of £170,000. To work out her available lump sum allowance she must first deduct a percentage of the value of any benefit crystallisation events (BCEs) that occurred prior 6 April 2024. Alison has valid FP16. Alison does not have a transitional tax-free amount certificate. Alison’s lifetime allowance previously-used amount is £360,000. 25% of this figure (£90,000) is deducted from her lump sum allowance. As Alison has FP16, this is fixed at £312,500. £312,500 - £90,000 = £222,500 Alison’s available lump sum death benefit allowance at 6 April 2024 is £222,500. Therefore, Alison’s lump sum allowance is sufficient for her to receive the tax-free PCLS of £170,000. The amount of the relevant benefit crystallisation event occurring on 22 March 2028 then needs to be deducted from this figure. £225,500 – £170,000 = £55,500 Alison’s lump sum allowance as of 22 March 2028 is £55,500.