yes!!!!!

ukdw

ukdw said:

Notepad_Phil said:

caveman8006 said:

The key question for me is what should people like me be doing? I have crystalized 100% of the existing LTA and was in the habit of taking a taxable income from the drawdown account to take my total earnings up to the higher rate limit (so as to avoid the threat of an LTA tax on any growth in the pot at 75, particularly when receipt of the State pension would have  severely constrained basic rate withdrawals between 67 and 75). Am I now safe in leaving the drawdown pot to grow as a potential IHT-free inter-generational transfer?   

Future governments can always make whatever changes they want, so I would never say anything is completely safe, but it appears to be safer now then it was pre-budget.

Rather than tinkering with the LTA - I suppose future governments might instead tinker with the £268k max figure.  
Or potentially re-introduce the LTA again.

So might be worth considering fully crystallising before the next government change, and therefore also fully using the £268k PCLS limit.

From Steve Webb on twitter  "Once the maximum tax free lump sum is a fixed cash amount, first it starts being eroded by inflation and then (a future Government?) thinks £268,275 is a lot and decides to reduce it a bit, then another bit.... I think we've just seen the gradual death of tax free cash"

Ciprico

.... So anyone at/near the old LTA probably has no upside and plenty of potential downside by not taking the full 25% tfls before next election.

Previously there was the possibility of LTA increasing with the 25% tfls

That percentage link seems to be well and truly broken and neither party likely to reintroduce it

Chickereeeee

ukdw said:

BuildTheWall said:

ukdw said:

Notepad_Phil said:

caveman8006 said:

The key question for me is what should people like me be doing? I have crystalized 100% of the existing LTA and was in the habit of taking a taxable income from the drawdown account to take my total earnings up to the higher rate limit (so as to avoid the threat of an LTA tax on any growth in the pot at 75, particularly when receipt of the State pension would have  severely constrained basic rate withdrawals between 67 and 75). Am I now safe in leaving the drawdown pot to grow as a potential IHT-free inter-generational transfer?   

Future governments can always make whatever changes they want, so I would never say anything is completely safe, but it appears to be safer now then it was pre-budget.

Rather than tinkering with the LTA - I suppose future governments might instead tinker with the £268k max figure.  
Or potentially re-introduce the LTA again.

So might be worth considering fully crystallising before the next government change, and therefore also fully using the £268k PCLS limit.

LTA won’t be re-introduced. It’s just too complex to administer and comes with a lot of historical baggage. 

More Likely is pensions brought under IHT. 

According to the headline of the Radio 4 today programme this morning - 'Labour have pledged to reintroduce the LTA should they get elected' - and instead plan to implement a bespoke system for the NHS.

A LTA of e.g. £1.8-2m would be almost the same as removing the LTA completely, apart from removing the IHT avoidance benefit. I.e. you could not deplete it without paying mostly HRT.

MDMD

ukdw said:

BuildTheWall said:

ukdw said:

Notepad_Phil said:

caveman8006 said:

The key question for me is what should people like me be doing? I have crystalized 100% of the existing LTA and was in the habit of taking a taxable income from the drawdown account to take my total earnings up to the higher rate limit (so as to avoid the threat of an LTA tax on any growth in the pot at 75, particularly when receipt of the State pension would have  severely constrained basic rate withdrawals between 67 and 75). Am I now safe in leaving the drawdown pot to grow as a potential IHT-free inter-generational transfer?   

Future governments can always make whatever changes they want, so I would never say anything is completely safe, but it appears to be safer now then it was pre-budget.

Rather than tinkering with the LTA - I suppose future governments might instead tinker with the £268k max figure.  
Or potentially re-introduce the LTA again.

So might be worth considering fully crystallising before the next government change, and therefore also fully using the £268k PCLS limit.

LTA won’t be re-introduced. It’s just too complex to administer and comes with a lot of historical baggage. 

More Likely is pensions brought under IHT. 

According to the headline of the Radio 4 today programme this morning - 'Labour have pledged to reintroduce the LTA should they get elected' - and instead plan to implement a bespoke system for the NHS.

Last September Wes Streeting was calling for it to be scrapped

https://www.ftadviser.com/pensions/2022/09/07/labour-would-scrap-pensions-tax-cap-to-boost-nhs-staff/?page=1

jaypers

Still got to get through parliament I guess and Labour already saying they will reverse this once in power!
https://news.sky.com/story/labour-to-oppose-removing-lifetime-pensions-allowance-calling-it-a-tax-cut-for-the-rich-12834963

dunstonh

jaypers said:

Still got to get through parliament I guess and Labour already saying they will reverse this once in power!
https://news.sky.com/story/labour-to-oppose-removing-lifetime-pensions-allowance-calling-it-a-tax-cut-for-the-rich-12834963

Labour will soon change their mind.  Train drivers, teachers, nurses, doctors, civil servants etc were all starting to breach the LTA.  All typical Labour voters and union members.

MK62

dunstonh said:

jaypers said:

Still got to get through parliament I guess and Labour already saying they will reverse this once in power!
https://news.sky.com/story/labour-to-oppose-removing-lifetime-pensions-allowance-calling-it-a-tax-cut-for-the-rich-12834963

Labour will soon change their mind.  Train drivers, teachers, nurses, doctors, civil servants etc were all starting to breach the LTA.  All typical Labour voters and union members.

They might reintroduce it at the expected 1.5-1.8M though........

ukdw

MK62 said:

dunstonh said:

jaypers said:

Still got to get through parliament I guess and Labour already saying they will reverse this once in power!
https://news.sky.com/story/labour-to-oppose-removing-lifetime-pensions-allowance-calling-it-a-tax-cut-for-the-rich-12834963

Labour will soon change their mind.  Train drivers, teachers, nurses, doctors, civil servants etc were all starting to breach the LTA.  All typical Labour voters and union members.

They might reintroduce it at the expected 1.5-1.8M though........

I suspect there would have been a similar negative reaction to a £1.8m hike too. 

If it's reintroduced I think it might be below £1m, with something special for doctors.

Moonwolf

dunstonh said:

jaypers said:

Still got to get through parliament I guess and Labour already saying they will reverse this once in power!
https://news.sky.com/story/labour-to-oppose-removing-lifetime-pensions-allowance-calling-it-a-tax-cut-for-the-rich-12834963

Labour will soon change their mind.  Train drivers, teachers, nurses, doctors, civil servants etc were all starting to breach the LTA.  All typical Labour voters and union members.

I'm not sure Labour will change their mind but they might change how they do it.  While many on here thought it was unfair that doctors etc. could get a higher DB pension that could be earned by drawdown or annuity from the LTA as 20x was effectively quite generous, that ignored the IHT benefits.  Even at £1m a very rich couple (who admittedly probably use a family trust) could if they wanted build a £1m pot each, live off other savings and pass on £3m tax free to their kids.

I suspect it is the IHT part they have their eyes on, perhaps just put a maximum pot, outside of IHT you can pass on to anyone but your spouse

As you can't pass a DB on in the same way.  I think it would have been perfectly fair to make the LTA a smaller multiple but only from state pension age, perhaps as low as 5x, but much higher if taken early.  So taking your DB at 55/57 could be say 30x for LTA with a taper down to 5x at SPA.

I'm guessing this group will hate that idea, both those who feel forced to work late and those who think state backed DB schemes are inherently unfair. 

Albermarle

NoMore said:

BuildTheWall said:

LTA won’t be re-introduced. It’s just too complex to administer and comes with a lot of historical baggage. 

More Likely is pensions brought under IHT. 

I agree, LTA was too complicated a tax and IHT protection is likely to be capped next, with also the max tax free cash being deflated in real terms as its not increased by successive governments.

These are my most immediate thoughts as well. 
Reintroducing LTA will probably be too complicated.
The IHT loophole was already getting more attention from think tanks like the IFS, and now it has become more of an issue.
I read this morning ( in the DT I think) that even a Tory leaning right wing think tank was saying that the LTA removal and the IHT pensions loophole together is too much of a gift for wealthier families.