These are not tested against a member's lifetime allowance themselves, so cannot give rise to a lifetime allowance charge if their value exceeds the member's lifetime allowance.
However, they will use up lifetime allowance, if the member has a Benefit Crystallisation Event (BCE) on or after 6 April 2006.
The test of how much lifetime allowance such pre 6 April 2006 pensions or annuities in payment use up, must take place just before the first post 5 April 2006 BCE is tested.
The value of a pre 6 April 2006 pension/annuity in payment is calculated as 25 times the pension/annuity in payment at the time of the test. If the pension in payment is a flexi-access drawdown pension that had previously been a capped drawdown pension, its value will be calculated as 25 times 80% of the maximum rate of capped drawdown pension that could have been paid in the year it ceased to be a capped drawdown pension.
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