Lifetime allowance transitional protections

Produced by Tolley in association with

Employment Tax

Guidance

This guidance note looks at transitional protection for lifetime allowance. The lifetime allowance was abolished from 6 April 2024. For details of transitional protection carried over into the replacement system for taxation of pension lump sums, see the Pension income and lump sum allowances from 6 April 2024 guidance note. It may be necessary to calculate the protection available under the old rules as set out below, as a starting point for protection available under the new rules.

Introduction

This guidance note describes the various forms of protection against the lifetime allowance charge which have been introduced, first when the tax regime for registered pension schemes was introduced by FA 2004, and subsequently, particularly as the lifetime allowance was reduced in 2012, 2014 and 2016.

Despite the lifetime allowance charge being abolished with effect from 6 April 2023, and the lifetime allowance regime being repealed from 6 April 2024, the lifetime allowance protections discussed below remain relevant, as they enable the individual to receive a higher tax-free lump sums after 5 April 2024 compared to those

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

David Everett

Partner, Lane Clark & Peacock , Employment Tax

David Everett, is the head of the Pensions Research team at LCP. One of his key roles is to analyse and communicate regulatory and professional developments to audiences both within and outside LCP.David has built up many years of experience in the occupational pensions regulatory field covering a broad spectrum including government policy and legislation, particularly that emanating from the Department for Work and Pensions, the Pensions Regulator, the Pension Protection Fund and other compensation schemes, the Pensions Ombudsman and the Courts and the technical and ethical regulation of actuaries through the Financial Reporting Council and the Institute and Faculty of Actuaries respectively.He also assists the ACA in responding to government consultations.He's the editor of LCP's weekly Pensions Bulletin and undertakes other technical writing for the firm, as well as contributing to TolleyGuidance Employment taxes for the Pensions module.

Popular Articles

Trusts and Inheritance Tax

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Personal Tax

Self assessment ― estimates and provisional figures

Self assessment ― estimates and provisional figuresIf the taxpayer does not have sufficient information to enable them to complete the tax return in the time allowed, they should include either a best estimate or a provisional figure. The taxpayer should not either leave a box blank or enter

14 Jul 2020 13:37 | Produced by Tolley Read more

Owner-Managed Businesses

Interest on late paid tax

Interest on late paid taxIntroductionInterest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.Harmonised legislation was introduced in 2009 to:•set statutory

14 Jul 2020 12:00 | Produced by Tolley in association with Philip Rutherford Read more

��Ƶ