Individual Protection 2016 (IP 2016)
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Individual Protection 2016 (IP 2016)

The following Pensions practice note produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Individual Protection 2016 (IP 2016)
  • The lifetime allowance
  • What is individual protection 2016 (IP 2016)?
  • Applying for IP 2016
  • After IP 2016 has been granted
  • When HMRC may withdraw an individual protection 2016 reference number
  • Appeal against HMRC’s refusal to issue or decision to withdraw an IP 2016 reference number
  • Requirement to tell HMRC if pension rights are reduced as a result of a pension debit
  • What happens if the member dies before they have made an application for individual protection 2016?

Individual Protection 2016 (IP 2016)


The lifetime allowance

While there is no limit on the total amount of authorised benefits a registered pension scheme can provide for and in respect of its members, there is a restriction known as the lifetime allowance, which restricts the total amount of tax relieved pension benefits that an individual can accumulate across all registered pension schemes during the course of their lifetime. The value of any authorised benefits paid out in excess of an individual’s lifetime allowance is subject to a tax charge known as the lifetime allowance charge. This applies to all types of registered pension schemes equally. Broadly speaking, defined contribution benefits are generally assessed for lifetime allowance purposes by reference to the value of the relevant individual’s pension savings ‘account’ (commonly known as a pensions pot), while for defined benefit (DB) pension savings, the value of the benefits is determined by reference to the capital value of the annual pension (using a factor of 20).

For most people the standard lifetime allowance applies, which has been changed on a number of occasions since its introduction on 6 April 2006 as follows:

Tax YearsLifetime Allowance
2010–2011£1.8 m
2011 - 2012£1.8m
2012 - 2013£1.5m
2013 – 2014£1.5m
2018–2019 onwardsIndexed with inflation (using £1m as a base figure)

For more information on the lifetime

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