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

Shifting pension rules 'eroding trust' and 'hindering' retirement confidence

Shifting pension rules 'eroding trust' and 'hindering' retirement confidence

Speculation on rules hitting confidence across every age group

Sahar Nazir
clock 17 November 2025 • 2 min read
Retirement confidence dips amid Budget speculation

Retirement confidence dips amid Budget speculation

Confidence is highest among those receiving professional financial advice

Jenna Brown
clock 12 November 2025 • 2 min read
The Great Wealth Transfer: women, wealth and what comes next

The Great Wealth Transfer: women, wealth and what comes next

Sponsored content from WIFA 2025 headline sponsor LV=

LV=
clock 03 November 2025 • 6 min read