Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Pensions Tax Manual

From
HM Revenue & Customs
Updated
, see all updates

Member benefits: pensions: drawdown pension rules applying from 6 April 2015: flexi-access drawdown fund - where member had designated funds in an arrangement into a flexible drawdown pension fund before 6 April 2015

Glossary PTM000001
   

Automatic conversion to flexi-access drawdown fund
Annual allowance consequences
Lifetime allowance and benefit crystallisation events
Taxation

Automatic conversion to flexi-access drawdown fund

Paragraphs 7, 8, 8A (1) and (2)(b) Schedule 28 Finance Act 2004

Where a member designated funds as available for the payment of drawdown pension before 6 April 2015 and qualified to take their pension as flexible drawdown (see PTM062580 onwards for more detail) then on 6 April 2015 the sums and assets so designated were member-designated funds (as are any sums or assets held for the purpose of the arrangement which arise directly or indirectly from such member-designated funds or from sums or assets which so arise or derive) provided at 5 April 2015 they had not been applied towards the provision of a scheme pension.

As of 6 April 2015, the member’s flexible drawdown pension fund automatically converted into a flexi-access drawdown fund, the funds ceased to be member-designated funds and become newly-designated funds.

Any designations of sums or assets for drawdown on or after 6 April 2015 under the arrangement holding this drawdown fund will go into the flexi-access drawdown fund.

From 6 April 2015 therefore, drawdown pension can continue to be taken from the arrangement in line with the guidance on flexi-access drawdown pensions at PTM062730.

Annual allowance consequences

The money purchase annual allowance rules (see PTM056500) apply to the member from the beginning of 6 April 2015. This is because the automatic conversion of a flexible drawdown pension fund to a flexi-access drawdown fund on that date constitutes flexible access for the purpose of the annual allowance.

Top of page

Lifetime allowance and benefit crystallisation events

The position is the same as described on PTM062730.

Top of page

Taxation

The position is the same as described on PTM062730.