This means that, if you take your pension benefits for the tax year 2023/24 or any subsequent tax year and they are in excess of the LTA, no pension lifetime allowance charge arises. 2) Act 2023) where the LTA Tax Charge on pension savings in excess of the LTA was removed. This was followed in July 2023 when HMRC issued a policy paper and draft legislation ( The Finance (No. In the Budget on 15 March 2023, the Government announced that they planned to make several changes to the pension annual allowance, lifetime allowance, and tax-free cash entitlement. ![]() Historically, when you started to take your pension benefits you would have paid a lifetime allowance charge on any pension savings taken over this amount. The LTA was later raised to £1.8 million and then reduced incrementally to its most recent level of £1,073,100 for the tax year 2023/24. The original limit was set at £1.5 million. It applies to all your personal and workplace pensions but not your State Pension or any overseas pensions. The lifetime allowance is the total amount of pension benefits you can build up in your lifetime before you need to pay a lifetime allowance charge. × What is the Pension Lifetime Allowance (LTA) and what are the changes that are being made to it? Please consult one of our qualified lawyers or financial advisers for advice tailored to your specific position. This article is for information only and does not constitute legal or financial advice. Employer Legal Advice – Managing Your Workforce.
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