yes!!!!!

zagfles

Albermarle said:

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 ?

No different from now then. PCLS is limited to 25% of remaining LTA, if exceeding the LTA is not picked up then too much PCLS could be paid.

So they may want to improve it, but if they carried on using the existing mechanism then it's no worse than now. They could even keep the 2023/4 approach, LTA remains but no charge.

keiran

So if someone is unfortunately retiring within the rest of this tax year, they see no benefit of the LTA removal and are subject to the £1.07m limit?

LHW99

We currently have pension monies designated as crystallised / uncrystallised.

Companies could designate the first £1.07m as "the 25% tax-free pot" and anything over that goes into a separate "totally taxable pot" or something with similar designations.

You get your tax-free 25% / £268k out in whatever way you want from the first, but anything from the second is taxed at your normal rate.

Could be workable.

kinger101

aldershot said:

There have been some media comments that the prospective cost of the change is around £66,000 per doctor saved, if it only prevents 15000 retiring early. I think that misses the point that if they don’t retire early, and continue to work and earn for a few more years, they will be paying much more than that in tax and NI anyway so the cost will be negated and we get to keep a few more consultants in the NHS, assuming of course that they were actually leaving the workforce which anecdotally, they were actually doing.  

This also applies to any other individual who decided to leave the workforce due to the LTA. As noted in another thread on the subject, it’s not the only reason why anyone (myself included) leaves the workforce, but it is a trigger point to making a decision that you may not make if you weren’t pushed. 

The tax and NI is effectively paid by the taxpayer, so that's somewhat circular.  But it's a relatively small cost compared to the improvement to patients' (and relatives) quality of lives.  Some of those getting operations sooner may also be able to return to work more quickly as well.  And of course, one does need to factor in the costs of training their replacements.

kinger101

keiran said:

ex-pat_scot 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?

If you have young children (e.g. nursery age) it's worth evaluating your longer term strategy (inc. previous years' AA) to determine if the additional 2023/2034 allowance might allow you access to 30 (rather than 15) nursery hours and the £2K "tax-free" childcare.  I did this yesterday and worked out I'll still be paying 100% tax on about £10K of my income.

Scot_39

kinger101 said:

aldershot said:

There have been some media comments that the prospective cost of the change is around £66,000 per doctor saved, if it only prevents 15000 retiring early. I think that misses the point that if they don’t retire early, and continue to work and earn for a few more years, they will be paying much more than that in tax and NI anyway so the cost will be negated and we get to keep a few more consultants in the NHS, assuming of course that they were actually leaving the workforce which anecdotally, they were actually doing.  

This also applies to any other individual who decided to leave the workforce due to the LTA. As noted in another thread on the subject, it’s not the only reason why anyone (myself included) leaves the workforce, but it is a trigger point to making a decision that you may not make if you weren’t pushed. 

The tax and NI is effectively paid by the taxpayer, so that's somewhat circular.  But it's a relatively small cost compared to the improvement to patients' (and relatives) quality of lives.  Some of those getting operations sooner may also be able to return to work more quickly as well.  And of course, one does need to factor in the costs of training their replacements.

The govt already had to make Judges a special case, Labour clearly want NHS Consultants - would they include GP / GP Partners etc, then who next - union bosses, train drivers etc etc.

I wonder how much the ave Labour MP gets in MP's pension - you know the ones that Times said cost us around 53% of their £80k+ basic + expenses package - after decades on the backbenches.

  

They used to be able to accrue 1/40th at highest rate - so 20 yrs say over 40k.

Change the 20x multiplier those on DB are effectively weighted on - to say average of last 10+ years of annuity rates  - and you would soon see MP's, civil servants and others - all screaming it needs to be raised.

Call me cynical - suspect it would never have been dropped.

Pat38493

Frankly the whole thing is very political but logically, there doesn't seem to be any reason to have all 3 things
- Annual allowance
- LTA
- Taper relief for extreme high earners.

Surely even if you want to limit extremely wealthy people from abusing pension advantages, you only need maximum 2 of those things, not all 3.

Also as others have pointed out the LTA tracking system and processes are not really suited to a situation where a large % of the population might find themselves in this situation - it's all very manual and not highly integrated with HMRC systems and processes.

And most relevantly I guess for the current debate, hitting the LTA definitely makes people think about whether they should stop working - it's a "nudge" to start thinking about when you can retire.

Workerbee999

I wonder if there is going to be a way for all pensions to be valued together and then £268k tax free if they add up to at least £1,073k? I have a DC around £400k and an unrelated deferred DB around £20k. I don’t want to commute some of the DB for tax free cash as the terms aren’t great, so I think I can only have £100k tax free?  would be great of I can take £268k tax free out for the DC to account for the DB value too….

Albermarle

Workerbee999 said:

I wonder if there is going to be a way for all pensions to be valued together and then £268k tax free if they add up to at least £1,073k? I have a DC around £400k and an unrelated deferred DB around £20k. I don’t want to commute some of the DB for tax free cash as the terms aren’t great, so I think I can only have £100k tax free?  would be great of I can take £268k tax free out for the DC to account for the DB value too….

AIUI , such details are not clear yet....

zagfles

Workerbee999 said:

I wonder if there is going to be a way for all pensions to be valued together and then £268k tax free if they add up to at least £1,073k? I have a DC around £400k and an unrelated deferred DB around £20k. I don’t want to commute some of the DB for tax free cash as the terms aren’t great, so I think I can only have £100k tax free?  would be great of I can take £268k tax free out for the DC to account for the DB value too….

It might be possible from April 2024, it depends how they decide to track PCLS usage after the LTA is abolished. For 23/24 tax year it won't be possible, as the current rules apply except no LTA charge for going into drawdown.