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  • Pensions_matter_2
    Pensions_matter_2 Posts: 102 Forumite
    Seventh Anniversary 10 Posts
    edited 16 March 2023 at 4:49PM
    There are quite a few other types of lump sum payment (which get special tax treatment) that are linked to the LTA (UFPLS being just one example) and the legislation going forward will have to deal with all of these, aswell as the PCLS, as a result of abolishing the LTA. 
  • keiran
    keiran Posts: 767 Forumite
    Part of the Furniture 500 Posts
    Can anyone state in what tax year/s the various changes take place?

  • ex-pat_scot
    ex-pat_scot Posts: 707 Forumite
    Part of the Furniture 500 Posts Photogenic Name Dropper
    keiran said:
    Can anyone state in what tax year/s the various changes take place?

    6 April 2023 ie 23-24 tax year.
    Print_Budget_2023.pdf (publishing.service.gov.uk)
  • keiran
    keiran Posts: 767 Forumite
    Part of the Furniture 500 Posts
    keiran said:
    Can anyone state in what tax year/s the various changes take place?

    6 April 2023 ie 23-24 tax year.
    Print_Budget_2023.pdf (publishing.service.gov.uk)
    So there's no need to hurry to do anything special/different before 5 April 23, especially if you're not retiring this year?
  • Malthusian
    Malthusian Posts: 11,055 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    edited 16 March 2023 at 5:00PM
    zagfles said:
    Interesting that of that £1.457M potential contributions since 2006, the vast majority of it (over £1M) would have to have been made in the 4 years of the previous Labour govt (2006-2010) when the AA was £250k+, rather than the 13 years under the coalition/Tories when the AA was cut to £50k then £40k then tapered. That just shows how generous pensions were to the rich under Labour!
    In the interests of fairness we should also point out there was no carry forward, you were restricted in how much you could draw out (even flexible drawdown, the harbinger of pension freedoms for those with at least £20,000pa in secure pension income, wasn't a thing yet). Being effectively forced to buy an annuity may have been a marvellous idea for hoi polloi but is not very attractive for the super-rich, who are more concerned with generational wealth than handing over millions to an insurer in exchange for a low-six-figures annuity, which is a sitting duck for tax. (Remember the 82% tax on death benefits?) 
    And as you point out, the Lifetime Allowance meant nobody would have paid in £255kpa for very long even without those factors.
    It illustrates how much more attractive the Tories have made pensions since they took over, while at the same time clamping down on the amount you can put in. 
  • MK62
    MK62 Posts: 1,740 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    They will also need to decide if PCLS already taken counts.....if so, decide on a method of discovery for that (if its not going to count, that hardly seems fair).....then decide if that should be index linked, then decide how far back to go......it's starting to look like it could get messy......sound familiar?
  • zagfles
    zagfles Posts: 21,421 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    zagfles said:
    Interesting that of that £1.457M potential contributions since 2006, the vast majority of it (over £1M) would have to have been made in the 4 years of the previous Labour govt (2006-2010) when the AA was £250k+, rather than the 13 years under the coalition/Tories when the AA was cut to £50k then £40k then tapered. That just shows how generous pensions were to the rich under Labour!
    In the interests of fairness we should also point out there was no carry forward, you were restricted in how much you could draw out (even flexible drawdown, the harbinger of pension freedoms for those with at least £20,000pa in secure pension income, wasn't a thing yet). Being effectively forced to buy an annuity may have been a marvellous idea for hoi polloi but is not very attractive for the super-rich, who are more concerned with generational wealth than handing over millions to an insurer in exchange for a low-six-figures annuity, which is a sitting duck for tax. (Remember the 82% tax on death benefits?) 
    And as you point out, the Lifetime Allowance meant nobody would have paid in £255kpa for very long even without those factors.
    It illustrates how much more attractive the Tories have made pensions since they took over, while at the same time clamping down on the amount you can put in. 
    This is true. So the reality is nobody's going to have a pot way above the LTA by choice. And now the opportunity for adding to it is very limited for the super-rich.

  • zagfles
    zagfles Posts: 21,421 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    MK62 said:
    They will also need to decide if PCLS already taken counts.....if so, decide on a method of discovery for that (if its not going to count, that hardly seems fair).....then decide if that should be index linked, then decide how far back to go......it's starting to look like it could get messy......sound familiar?
    It could be very simple. 25% of remaining LTA as at abolision date (April 2024). Then track just like the LTA. No harder than what they do now with LTA.
    I doubt it'll be indexed. Many think tanks says it's too high and should be £50-100K. So they'll probably let inflation erode it, maybe with an increase in 10-20 years. But at the whim of govt rather than automatically.
  • Clive_Woody
    Clive_Woody Posts: 5,937 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    keiran said:
    keiran said:
    Can anyone state in what tax year/s the various changes take place?

    6 April 2023 ie 23-24 tax year.
    Print_Budget_2023.pdf (publishing.service.gov.uk)
    So there's no need to hurry to do anything special/different before 5 April 23, especially if you're not retiring this year?
    I went into our work system yesterday afternoon and increased my annual contribution now that £40k is no longer the limit. The cut off for April payroll (including monthly pension deduction) is in a few days time. I did get various alerts saying that I would be potentially exceeding the annual allowance.


    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • Albermarle
    Albermarle Posts: 27,801 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    But that's not how democratic politics works. You have to show people you are different to the other side, otherwise why would they vote for you? You have to create divisions, you have to pretend to be on their side, you have to pretend the other side don't care about you and people like you, only their "own sort".

    As Winston Churchill said

     ' Democracy is the worst form of Government in the World,

     apart from all the other ones'

    It could be very simple. 25% of remaining LTA as at abolision date (April 2024). Then track just like the LTA. No harder than what they do now with LTA

    Although I have had the impression from various threads in the past, that the system for monitoring LTA% built up by an individual from different schemes/crystallisations, is rather loose. It seems to rely to some extent on the individual keeping track of it.( although no doubt HMRC would catch up one day )  If that is the case, and I am not really sure, then maybe a more robust system ( central register of some kind)  would be needed to prevent too  much tax free cash being paid, or at least so it would be picked up very quickly ?

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