Lifetime allowance abolition – an update
The abolition of the Lifetime Allowance (LTA) is being undertaken in two stages. The first was the removal of the LTA tax charges from 6 April 2023. The second will be the abolition of LTA itself from 6 April 2024. Rather than a simple abolition, the LTA is in effect being replaced by lump sum allowances which will still control the level of tax-free cash that an individual can receive from registered pension scheme arrangements. On 4 January 2024, HMRC published an updated newsletter providing further guidance on the how this will work in practice.
Should my husband buy an annuity?
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Changes to the Lifetime Allowance
Background
Following the changes to the Lifetime Allowance ("LTA") regime effective from 6 April of this year, we have some more clarity on how these changes will operate in practice and on the implications for individuals with Enhanced Protection or any of the Fixed Protections. In this briefing we highlight three key points.