Lifetime Allowance reduction

06 April 2016

Legislation will be introduced to reduce the Lifetime Allowance (LTA) to £1 million from 6 April 2016 and provide 2 new transitional protections, fixed protection 2016 and individual protection 2016. The transitional protections are similar to fixed protection 2014 and individual protection 2014. A new digital service is being provided for individuals to apply for the protections from July 2016. There is no formal deadline for applying for protection, but if individuals intend to rely on a protected LTA they will need to have applied and obtained a reference number from HMRC before they start taking any benefits.

HMRC’s Pension Schemes Newsletter 76 sets out the processes for individuals who want to take their benefits before the digital service is available in July 2016.

Further information about the Lifetime Allowance reduction can be found in HMRC’s latest Pension schemes newsletter 77.