The lifetime allowance (currently £1,073,100) is one of the ways in which tax relief for pension contributions is restricted. On the occasion of a benefit crystallising event, tax will be charged on the amount of the value of a pension fund in excess of the lifetime allowance. The charge will be at 55% if the pension is taken as a lump sum, or at 25% on any excess left in the fund. Various protections have been introduced to enable a person to retain the benefit of old lifetime allowance rates, and a number of options are available to mitigate a charge.
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The lifetime allowance (currently £1,073,100) is one of the ways in which tax relief for pension contributions is restricted. On the occasion of a benefit crystallising event, tax will be charged on the amount of the value of a pension fund in excess of the lifetime allowance. The charge will be at 55% if the pension is taken as a lump sum, or at 25% on any excess left in the fund. Various protections have been introduced to enable a person to retain the benefit of old lifetime allowance rates, and a number of options are available to mitigate a charge.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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