What if the Lifetime Allowance Comes Back?
This video is coming out in May 2024. As of 6th April 2024, just a few weeks ago, the Lifetime Allowance has been abolished. For the year prior to that, it still existed, but any tax charge arising as a result of crystallising pension benefits over the lifetime allowance was set to zero. This is because it took time to get legislation passed to abolish the LTA, so this was a stop-gap to make sure people weren’t penalised. But it might have implications for a possible reintroduction.
It’s fair to say that reintroducing the LTA isn’t going to be an easy task for an incoming Labour government. It certainly won’t be a case of cutting and pasting the old legislation. There would need to some careful thought given to the implications of its reintroduction. As the election approaches, I think that the Labour Party will need to make their thinking quite clear in order to forestall action by pension scheme members which might undermine any tax take from a future reintroduction of the LTA. Let’s watch carefully for that information – I’ll be sure to do a video on it as and when it appears.
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