LTA increase by 3%

ianthy

Just incase anyone missed it the Treasury has announced that LTA will increase to £1,030,000. I am not sure what this means for anyone with LTA at £1.25m

peterg1965

Those who have a £1.25M, £1.5M or £1.8M LTA would be retaining this as they took Fixed Protection. Those LTA figures will not increase by the CPI.

ianthy

peterg1965 wrote: »

Those who have a £1.25M, £1.5M or £1.8M LTA would be retaining this as they took Fixed Protection. Those LTA figures will not increase by the CPI.

At some point the LTA could overtake the fixed protection of £1.25m etc., What options exist for those that have locked in to the £1.25m and later find the LTA has exceed this?

EdSwippet

ianthy wrote: »

At some point the LTA could overtake the fixed protection of £1.25m etc., What options exist for those that have locked in to the £1.25m and later find the LTA has exceed this?

No options, exactly. Any LTA percentage you haven't yet used up by crystallising would be measured against the now-higher standard LTA when you next crystallise. But if you have already crystallised 100% of your LTA by the time inflation grows the standard LTA past your protection then you can't go back in time to gain anything from the now-higher standard LTA.

In other words, over time inflation erodes the benefits of LTA protection.