The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
The maximum amount that an individual can build up in pension savings is limited in two ways:
•second, the lifetime allowance limits the total tax-relieved value that can be accumulated into registered pension schemes. Its operation and the lifetime allowance charges that can arise are discussed below.
The lifetime allowance was introduced from 6 April 2006. When a member of a scheme takes benefits in excess of his applicable lifetime allowance, he will be liable to a tax charge and the amount of the tax charge will depend on whether the excess benefits are taken as a lump sum or not.
The amount of the lifetime allowance has changed frequently:
Note that when the ‘standard lifetime allowance’ is referred to below, this means the figure in the above table for the applicable tax year.
FA 2004, s 218(2A)–(2D)
Members disadvantaged by the introduction of, or by reductions in, the lifetime allowance could apply to protect their pension savings. The various protections are discussed below.
Each time a member crystallises some benefits from a pension (known as a benefit crystallisation event (BCE)), the capital value of benefits drawn is calculated and the lifetime allowance prorated. The re
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