David Downie: Tackling the DB transfer 'appropriate limit' hurdle

Partial transfers

clock • 4 min read

DB transfers that breach the 'appropriate limit' can have serious tax implications if a client has enhanced protection, writes David Downie. Here, he looks at how advisers can avoid this outcome and use partial transfers to their advantage …

Scrutiny from the FCA and rule changes now mean there is a lot to consider when advising on defined benefit (DB) transfers. In this climate, it is easy to overlook the extra hurdle of the ‘appropriate limit' rule when your client has enhanced protection. In 2006, ‘pensions simplification' came into force, replacing long-standing occupational pension rules relating to DB schemes. Some higher paid employees had built up pension benefits with a value that exceeded the lifetime allowance (LTA) in advance of the rules changing. 'Enhanced protection' was one of the options made available to...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Retirement

Millions make retirement trade-offs to fund children and grandchildren's university costs

Millions make retirement trade-offs to fund children and grandchildren's university costs

Includes many delaying retirement

Jen Frost
clock 03 June 2026 • 3 min read
Watch PA's Working Lunch with L&G: Navigating the new landscape of retirement solutions

Watch PA's Working Lunch with L&G: Navigating the new landscape of retirement solutions

Catch up on the discussion

Professional Adviser
clock 09 April 2026 • 1 min read
The changing nature of retirement planning

The changing nature of retirement planning

Retirement planning conversations must 'evolve'

Lorna Shah
clock 02 April 2026 • 4 min read