If an individual crystallised benefits before the current regime was implemented on 6 April 2006, no BCE would have applied to the relevant arrangements. If benefits crystallised before that date and the same funds were subject to a second crystallisation after 5 April 2006, there will be no BCE and no test against the lifetime allowance.

Example 1

Lorna converts her money purchase fund to a drawdown arrangement in 2004. In 2008 she uses the funds in the same drawdown arrangement to purchase an annuity.

In this case, there is no BCE (and no test against the lifetime allowance) either when Lorna went into drawdown or when she subsequently elected for annuity purchase.

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