The following Pensions guidance note Produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:
The basic principle underpinning the pensions tax regime is that members of registered pension schemes enjoy:
various tax advantages while accruing retirement and life assurance benefits, and
certain tax advantages when particular benefits are paid from a pension scheme (eg the tax-free pension commencement lump sum)
In exchange, and if tax charges are to be avoided, a registered pension scheme must comply with various restrictions as regards the:
accrual of benefits
payment of contributions, and
payment of benefits
One of the key restrictions imposed on the accrual of members’ benefits under the pensions tax regime is the lifetime allowance.
While there is no legal limit on the value of benefits that an individual might accrue under a registered pension scheme, there is a limit as regards the aggregate amount of benefits that can be saved and drawn by and in respect of an individual from their registered pension schemes without triggering tax charges. That limit is the lifetime allowance.
The value of any pension benefits paid in excess of the lifetime allowance is subject to a tax charge known as the lifetime allowance charge—for further information, see The lifetime allowance charge, below.
Some of an individual's lifetime allowance will be used up every time a ‘benefit crystallisation event’ (BCE) occurs. Traditionally, a BCE will most often occur when an individual becomes
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234