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LTA Question - Indexing
alanobrien
Posts: 3,309 Forumite
Haven't managed to find a straight answer to this one as yet.
The LTA is currently 1,030,000
The government intends to index the standard Lifetime Allowance annually in line with the Consumer Prices Index (ref moneyadvice service)
So, my question is what about FP2016 etc are LTA protection schemes indexed as well or are they simply erroded over time ?
I suspect the latter is likely to be the case but cant find anything about it on the HMRC site.
The LTA is currently 1,030,000
The government intends to index the standard Lifetime Allowance annually in line with the Consumer Prices Index (ref moneyadvice service)
So, my question is what about FP2016 etc are LTA protection schemes indexed as well or are they simply erroded over time ?
I suspect the latter is likely to be the case but cant find anything about it on the HMRC site.
0
Comments
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They don't index, no.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
alanobrien wrote: »Haven't managed to find a straight answer to this one as yet.
The LTA is currently 1,030,000
The government intends to index the standard Lifetime Allowance annually in line with the Consumer Prices Index (ref moneyadvice service)
So, my question is what about FP2016 etc are LTA protection schemes indexed as well or are they simply erroded over time ?
I suspect the latter is likely to be the case but cant find anything about it on the HMRC site.
They are not indexed.
However, any future BCEs you will incur will be tested against the higher of the standard LTA and your enhanced protection.
For example ...
"If, in future, the standard lifetime allowance rises to be more than £1.8 million, the member’s FP 2012 will stop. They will no longer need protection, as the standard lifetime allowance will be more advantageous. Their lifetime allowance will be the standard lifetime allowance."
https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm093100I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.0
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