Contact
Lifetime allowance abolition – an update
The UK Lifetime Allowance (LTA) tax charges ceased to apply from 6 April 2023, and the LTA itself was abolished with effect from 6 April 2024. Rather than a simple abolition, the LTA has, however, been replaced by lump sum allowances which continue to limit the amount of tax-free cash that an individual can receive from registered pension schemes and from some overseas schemes that hold UK tax-relieved amounts.
Two new lump sum allowances have been introduced: the "lump sum allowance" (LSA) and the "lump sum and death benefit allowance" (LSDBA), together referred to in this article as the "Lump Sum Allowances".
In the context of overseas pension savings, the Lump Sum Allowances are relevant to anyone who makes a transfer from a UK registered pension scheme to an overseas pension scheme (and for a period following such transfer). They are also relevant to the availability of tax-free lump sums for UK-resident individuals receiving benefits from overseas arrangements, and to the payment of benefits from non-UK schemes that hold funds in respect of which UK tax relief has previously been granted.
Click here to read more.
© Stephenson Harwood LLP 2023. Information contained on this page is current as at the date of first publication and is for general information only. It is not intended to provide legal advice.