Adviser > Individual > Drawdown > Transfers
Transfers
Can my client transfer another pension plan into their existing drawdown arrangement?
| Pension not crystallised | Benefits taken (crystallised) |
| Your client can transfer their second pension plan into the first plan before it matures (your client has not taken any benefits from it).
| If your client has already taken benefits from their second pension plan, then it is not possible to merge them with the first pension plan. HMRC require that an income drawdown plan can only be transferred into a plan where "no other sums or assets are held at that time. In effect it has to be dedicated for the purpose of the transfer." This is to ensure that benefits, specifically the lump sum is not paid out twice. |
For more information visit www.hmrc.gov.uk/manuals/rpsmmanual/RPSM14106040.htm.
Do transfers in drawdown have to be held separately from uncrystallised funds?
Legislation requires that
- such sums of money have to be held in a separate dedicated plan.
- pension funds that have already been crystallised into an income drawdown arrangement may only be transferred into an arrangement which holds "no other sums or assets," as stated in the HRMC guide RPSM4106040.
So if the client has plans with both uncrystallised and crystallised rights they cannot be transferred into the same plan.
In addition if the client wants to make ongoing contributions they cannot be made into a Transfer in Drawdown (TID) arrangement.
Obviously if the client has already consolidated their retirement arrangements into one plan prior to crystallising into income drawdown this is not an issue.
My client is doing a transfer in drawdown (TID) and their fund value has increased. Can they take more income from the new plan?
A transfer in drawdown results in a review of GAD limits effective from the next pension anniversary. This could result in a plan subject to 120% GAD/5 year reviews being switched to the new 100% GAD/3 year review basis earlier than it would be otherwise.
For professional advisers only
