Oh goody, another LTA question

artyboy

So let's say I crystallise at exactly the LTA. Does that mean I have used 100% of my allowance or does it mean I have used £1,073,000?

Reason being, if it's the former, does it mean that I can't benefit from tax relief on further contributions if:

1) The LTA allowance is raised in future
2) The market tanks after crystallisation and I'd like to top it up.

...because I would already have used '100%'? Between me and Mrs Arty, we'd have 500k in cash if we did fully crystallise and one or both of us could still be working so using it most efficiently will be a priority.

thanks
Arty

Pat38493

artyboy said:

So let's say I crystallise at exactly the LTA. Does that mean I have used 100% of my allowance or does it mean I have used £1,073,000?

Reason being, if it's the former, does it mean that I can't benefit from tax relief on further contributions if:

1) The LTA allowance is raised in future
2) The market tanks after crystallisation and I'd like to top it up.

...because I would already have used '100%'? Between me and Mrs Arty, we'd have 500k in cash if we did fully crystallise and one or both of us could still be working so using it most efficiently will be a priority.

thanks
Arty

Yes unfortunately.  As I understand it you have used 100% so even if it doubles you are done.

Marcon

artyboy said:

So let's say I crystallise at exactly the LTA. Does that mean I have used 100% of my allowance or does it mean I have used £1,073,000?

Reason being, if it's the former, does it mean that I can't benefit from tax relief on further contributions if:

1) The LTA allowance is raised in future
2) The market tanks after crystallisation and I'd like to top it up.

...because I would already have used '100%'? Between me and Mrs Arty, we'd have 500k in cash if we did fully crystallise and one or both of us could still be working so using it most efficiently will be a priority.

thanks
Arty

You've used 100%. Any change in the LTA (up or down!) won't have any impact.

However, you could save up to a further £30K on top of the LTA using the 'small pots' regime - 3 personal pensions each of no more than £10K at the time you withdraw them under the 'small pots' regime. A small pot uses 0% of the LTA.

TcpnT

It means 100%. No future LTA allowed.

artyboy

Thanks all, suspected as much... and yes, if the small pots loophole is still around, it does sound like our last chance saloon if we do fully crystallise 

NedS

It's a slim shot, but the rules could always change at the budget - the chancellor is looking at how to get people in their 50's back to work, and all those NHS consultants who've hit their LTA are not going to be tempted out of retirement under the current rules. But as it stands, once you've hit 100%, that's it (other than the 3 x small pots).