The following Employment Tax guidance note by Tolley in association with John Hayward provides comprehensive and up to date tax information covering:
As from 6 April 2018 the lifetime allowance increases annually in line with increases in the Consumer Price Index CPI FA 2004 s 218 2A 2D
Testing against the lifetime allowance takes place at a benefit crystallisation event BCE Generally a benefit crystallisation event will occur when benefits are taken At the time ofthe introduction ofthe limit it was recognised that there were some people with pension rights already exceeding the lifetime allowance and that without protecting them in some way they would become subject to a lifetime allowance charge see below when benefits are taken Two forms ofprotection were introduced Primary protection was designed for those who as at 5 April 2006 already had pension rights that exceeded 1 5m So long as those individuals registered for primary protection before 6 April 2009 they received the benefit ofan enhanced lifetime allowance calculated by reference to the value ofthe individual s pension rights as of5 April 2006 The second form ofprotection enhanced protection was available to anybody whether or not the value oftheir pension rights at 5 April 2006 already exceeded the then lifetime allowance By undertaking not to accrue additional pension rights other than a limited exemption associated with defined benefit scheme membership the individual with enhanced protection benefits from an unlimited lifetime allowance Registration was necessary in order to benefit from one ofor both forms ofprotection PTM092410 The lifetime allowance from 6 April 2011 Finance Act 2011 reduced the lifetime allowance to 1 5m from 6
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