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Lump sum allowances after the LTA: the LSA, LSDBA and TTFAC
The lifetime allowance is gone. Two ceilings on tax-free money took its place — and a certificate that can move the line either way.
Based on HMRC’s Pensions Tax Manual (PTM171000, PTM172000, PTM174300) and Finance Act 2024 Schedule 9.
6 min read · Last reviewed
— In short
Since 6 April 2024 the lifetime allowance has been abolished, replaced by two ceilings on tax-free money. The Lump Sum Allowance (LSA), £268,275 as standard, caps the tax-free cash taken in life; the Lump Sum and Death Benefit Allowance (LSDBA), £1,073,100, caps tax-free lump sums across life and death together. Amounts above an allowance are taxed at the recipient's marginal rate, and a transitional certificate (TTFAC) can change how much of each is already used.
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Since 6 April 2024 the lifetime allowance is abolished. Two separate ceilings on tax-free money replace it: the Lump Sum Allowance (LSA), £268,275 as standard, caps the tax-free cash you can take in your lifetime; the Lump Sum and Death Benefit Allowance (LSDBA), £1,073,100, caps tax-free lump sums across life and death together. A transitional certificate (TTFAC) can change how much of each you are treated as having already used.
- Lump Sum Allowance (LSA)
- £268,275
- Lump Sum & Death Benefit Allowance (LSDBA)
- £1,073,100
- Tax-free cash on crystallisation
- lower of 25% or remaining LSA
- Treatment of any excess
- member's / beneficiary's marginal rate
Protected members keep higher figures (for example Fixed Protection 2016 gives an LSA of £312,500 and an LSDBA of £1,250,000). The standard figures live in the versioned tax-year config and are cited to FA 2024 Sch 9, PTM171000 (LSA) and PTM172000 (LSDBA).
The Lump Sum Allowance (LSA)
The LSA is the running total of tax-free cash a member can take while alive — principally the pension commencement lump sum (PCLS). Each PCLS consumes the lower of 25% of the amount crystallised or whatever LSA remains. Once the £268,275 is used, further “tax-free” cash is taxed at the member’s marginal rate; the old 55% / 25% lifetime-allowance charges no longer exist.
- Standard Lump Sum Allowance
- £268,275
- Already used
- −£100,000
- Remaining LSA
- £168,275
- PCLS requested
- £200,000
- Tax-free (capped at remaining LSA)
- £168,275
- Excess — taxed at marginal rate
- £31,725
Full detail and the protection variants are in The Lump Sum Allowance, explained; to run a specific PCLS, use the Lump Sum Allowance calculator.
The Lump Sum and Death Benefit Allowance (LSDBA)
The LSDBA, £1,073,100 as standard, is the wider ceiling: it counts tax-free lump sums paid in life and on death together. PCLS consumes it quietly alongside the LSA; the cases that surprise advisers are serious ill-health and death before age 75, where the whole lump sum is tested against it. Post-75 death benefits are taxed as the beneficiary’s income rather than allowance-tested.
The pre/post-75 boundary and a worked death-benefit excess are in The LSDBA and the £1,073,100 ceiling; the LSDBA calculator tests a specific event. (PTM172000, PTM173000; FA 2024 Sch 9.)
The transitional tax-free amount certificate (TTFAC)
For tax-free cash taken before 6 April 2024, the rules assume you used the maximum — a standard deduction of 25% of the lifetime allowance you crystallised. Where the actual tax-free cash was lower, a TTFAC swaps that assumption for the evidenced figure and recovers allowance; where it was higher, the certificate binds against you. On one worked history a certificate recovers £64,620 of LSA; on the mirror case it costs £35,380 — and once issued it cannot be undone.
Whether a certificate helps is an evidence question, not a default — the decision guide is Do I need a TTFAC? and both directions are worked in When a TTFAC helps — and when it hurts. The TTFAC calculator compares the default and evidenced positions side by side. (PTM174300, PTM174200.)
Common questions
What replaced the lifetime allowance?
Two allowances, from 6 April 2024: the Lump Sum Allowance (£268,275) for tax-free cash taken in life, and the Lump Sum and Death Benefit Allowance (£1,073,100) for tax-free lump sums across life and death. Amounts above an allowance are taxed at the recipient’s marginal rate, not by a separate charge.
What is the lump sum allowance for 2026/27?
£268,275 as standard. Members with valid lifetime-allowance protection keep a higher figure — for example £312,500 under Fixed Protection 2016.
Is the LSDBA the same as the old lifetime allowance?
No. The £1,073,100 figure matches the final standard LTA, but the LSDBA tests only tax-free lump sums (in life and on death) — not the value of pensions in payment. It is a tax-free-cash ceiling, not a total-benefits limit.
Do I need a transitional tax-free amount certificate?
It depends on whether the tax-free cash actually taken before April 2024 was less than the 25%-of-LTA default — less, and a certificate recovers allowance; more, and it costs you. It is an evidence question; see the decision guide above and check the figures in the TTFAC calculator.
Running a real client position? Each calculator above produces a branded compliance-annex PDF with the full working and the HMRC references — drop it straight into the file. For planning and illustration only; this guide does not constitute financial or tax advice.
Sources & grounding
Allowance values (£268,275 standard LSA = lsaAmount 26827500; £1,073,100 standard LSDBA = lsdbaAmount 107310000): calc-engine versioned config 2026-27.json, per FA 2024 Sch 9 / PTM171000 / PTM172000 — the same constants the LSA/LSDBA calculators and spokes render.
LSA worked example (used £100,000 → remaining £168,275 → £200,000 PCLS → tax-free £168,275, excess £31,725 at marginal rate): the engine computation shown on /calculators/lump-sum-allowance and in “The Lump Sum Allowance, explained”.
TTFAC figures (default 25%-of-LTA-used deduction vs evidenced TFC; a worked case recovers £64,620, the mirror case costs £35,380): calculateTTFAC and the two published TTFAC spokes, per PTM174100 / PTM174300 / PTM174200.
Marginal-rate treatment of any excess: the two-stage repeal — the 55%/25% lifetime allowance CHARGES were removed from 6 April 2023 (Finance (No. 2) Act 2023 s.18, with s.19 taxing the relevant lump sums at marginal rate from that date), and the ALLOWANCE itself was abolished a year later, from 6 April 2024 (FA 2024 Sch 9). Both 2023 sections were themselves REPEALED on 22 February 2024 by FA 2024 s.14(3) — “superseded by the amendments contained in Parts 1 and 2 of Schedule 9” — so a reader following the citation will find them marked repealed; their 6 April 2023 effect is unaffected. Repeal status added 2026-08-07; verified against legislation.gov.uk F(No.2)A 2023 s.18 and FA 2024 s.14. PTM171000 / PTM172000.
For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.
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