HMRC have published a lifetime allowances newsletter “to update stakeholders on the latest news for pension schemes”.
The guidance first confirms that:
- From 6 April 2023 the lifetime allowance (LTA) charge will be removed.
- The lifetime allowance will be fully abolished from the 2024-25 tax year.
- This means that from 6 April 2023 the current lifetime allowance framework remains in place and the lifetime allowance for 2023-24 remains at £1,073,100.
The interaction between the pension commencement lump sum and lifetime allowance protections is then explained in depth. The complexity of the rules is emphasised by the fact that the new guidance includes ten examples on this aspect.
The overall structure of the guidance is:
- Pension commencement lump sum and lifetime allowance protections
- Taxable lump sums and PAYE for employers payroll reporting
- Public Service Pensions Remedy (McCloud)
- Further guidance
- Lifetime allowance working group
Related content from Claritax Books
Pension Tax Guide is a thorough and practical guide to the complexities of the UK pension rules, and to the part they play in legitimate tax planning. Suitable for accountants, tax specialists and other finance professionals, the book is written by Katharine Lindley, a client director with EQ Investors.