The Finance Act 2011 for pension lawyers
Produced in partnership with Herbert Smith Freehills and Naveed Soomro of Squire Patton Boggs
The Finance Act 2011 for pension lawyers

The following Pensions practice note produced in partnership with Herbert Smith Freehills and Naveed Soomro of Squire Patton Boggs provides comprehensive and up to date legal information covering:

  • The Finance Act 2011 for pension lawyers
  • Reduction in the annual and lifetime allowances
  • Fixed protection
  • Pension input amounts
  • Pension input periods
  • Changes made by FA 2011
  • The case of the straddling pension input period
  • Measures to alleviate the impact of the reduction in annual allowance
  • The three-year carry forward rule
  • The deferred member exemption
  • More...

The Finance Act 2011 for pension lawyers

The Finance Act 2011 (FA 2011) received Royal Assent on 27 July 2011. FA 2011 enacted proposals (aimed at raising revenue) that were proposed by HM Treasury in July 2010 and confirmed on 14 October 2010, following concerns that earlier proposals put forward by the previous government disadvantaged high earners only and introduced more complexity to the tax system.

This Practice Note looks at the changes made by the FA 2011 for registered and unregistered pension schemes, including in relation to:

  1. the lifetime allowance

  2. the annual allowance

  3. pension input periods

  4. the introduction of Scheme Pays for the payment of the annual allowance charge

  5. the relaxation of the requirement to take benefits at age 75

  6. the removal of age 75 restrictions for lump sums and lump sum death benefits

  7. double taxation, and

  8. the disguised remuneration rules

For more information on the pensions tax regime, see Practice Note: Tax treatment of pensions—an introduction.

Reduction in the annual and lifetime allowances

The lifetime allowance is the total amount of tax-relieved pension savings that an individual can make within registered pension schemes during their lifetime.

In contrast, the annual allowance is the maximum amount of pension savings that can be made in a year without triggering a charge to tax for the member (known as the annual allowance charge).

FA 2011 made two key changes to the annual

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