TTFAC: when the certificate recovers £64,620 — and when it costs £35,380

A member who crystallised benefits under the Lifetime Allowance does not start the new regime with a clean £268,275 Lump Sum Allowance. The transitional default deducts 25% of the LTA percentage they used — built on the assumption that every crystallisation took maximum tax-free cash. A Transitional Tax-Free Amount Certificate replaces that assumption with evidence: the scheme-documented tax-free amounts actually paid. The certificate isn't an optimisation lever — it's a substitution of fact for assumption, and it binds whichever way the facts cut.

Case A — the default overstates; the certificate recovers

A member used 80% of the £1,073,100 LTA (£858,480 crystallised), much of it DB scheme pension where little tax-free cash was actually drawn — scheme statements evidence £150,000.

A scheme pension can crystallise LTA with little or no tax-free cash. No cash does not itself rule out a certificate; the full benefit history and timing still need checking.

PTM174100 / PTM174300 — figures engine-computed against the 2026/27 config

Case B — same history, opposite answer

Now suppose the evidence shows £250,000 of tax-free cash — a scheme-specific protected PCLS that paid more than 25%. The evidenced deduction (£250,000) exceeds the default (£214,620): remaining LSA falls from £53,655 to £18,275. A certificate here costs £35,380 of allowance — a valid certificate cannot be discarded merely to obtain the better default. On these facts the default leaves £35,380 more remaining allowance than a certificate would; the TTFAC calculator runs both paths side by side before anyone applies.

The common errors

Three recur. The first is applying without working both paths — the scheme-specific-PCLS reversal above. The second is treating an application as enough: for a living member, the certificate must be issued before entitlement to a relevant lump sum on or after 6 April 2024. Ordinary drawdown income is not that event; personal-representative applications have separate timing rules. The third is forgetting the LSDBA side: the certificate substitutes evidence for both allowances at once, and pre-75 serious ill-health and death-benefit events carry a 100% default, not 25% — a history containing one changes the LSDBA arithmetic dramatically.

An inaccurate certificate must be cancelled. The allowances and affected events are recalculated using the actual transitional amounts, even if the error is discovered before formal cancellation. This corrects the evidence; it is not an election to return to the more favourable default (PTM174300).

PTM174300 (timing, evidence and correction) · PTM174200 (LSDBA defaults)