LTA: remove charge from April 2023 and abolish from April 2024

RogerPensionGuy

The press report below appears to be getting the facts all mixed up and helping confusion again. 

Labour also apparently saying they will roll back on pension changes even if it hurts the NHS staff issues.

I still find it interesting that judges and possibly doctors are or should be allowed different pension rules as it suits politicians, maybe judges or doctors should not pay income tax for political reasons.

It will be interesting if Labour keep up saying they will roll back these pension changes, instead of the proposed pension changes being helpful, they will just cause more confusion and distrust about how all the politicians just play with long-term saving plans for all, a total shambles these last 12 years since the LTA was 1.8M.
.

https://www.theguardian.com/politics/2023/mar/18/jeremy-hunt-backed-labour-plan-last-year-tax-break-nhs-pensions

zagfles

RogerPensionGuy said:

The press report below appears to be getting the facts all mixed up and helping confusion again. 

Labour also apparently saying they will roll back on pension changes even if it hurts the NHS staff issues.

I still find it interesting that judges and possibly doctors are or should be allowed different pension rules as it suits politicians, maybe judges or doctors should not pay income tax for political reasons.

It will be interesting if Labour keep up saying they will roll back these pension changes, instead of the proposed pension changes being helpful, they will just cause more confusion and distrust about how all the politicians just play with long-term saving plans for all, a total shambles these last 12 years since the LTA was 1.8M.
.

https://www.theguardian.com/politics/2023/mar/18/jeremy-hunt-backed-labour-plan-last-year-tax-break-nhs-pensions

It's almost as if they want to hurt the NHS. 

Meanwhile those over 55 and close to/over the LTA in flexible DC schemes can happily stuff their pension with potentially 3 years worth of carry forwards today and another £60k next year and probably the year after, and crystallise the whole lot before that shower have a sniff of power.

But the likes of doctors in inflexible DB schemes would be more limited in how they could pre-empt any LTA re-introduction.

MK62

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

zagfles

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

I doubt they disagree with it. They called for it a few months ago! They're just playing political games by using the issue to try to portray the Tories as standing up for the interests of the rich, that tired old trope. They don't seem to realise that doesn't work anymore, at the last election poorer people were more likely to vote Tory than richer people.

According to yougov polling on the budget, the public are evenly divided over the LTA. People were far more against cut in beer duty So if they think their policy stance is a vote winner they're deluded.

Albermarle

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

If I was a betting man, then I would say if Labour get in they will not actually in the end reverse the LTA abolition, as it would be too complicated. Plus negative effect on Doctors etc
However including pension pots in IHT calculations ( or partly include over a certain amount for example ) could well be on the agenda.
Even the normally very pro Tory/anti LTA   Daily Express is expressing some reservations. Quote

Labour loves accusing Tory chancellors of helping out their rich mates, so at first I scoffed Shadow Chancellor Rachel Reeves line of attack But the more I look at Hunt's move, the more I see her point. Hunt has just given super-wealthy Britons a massive opportunity to fight back against his own inheritance tax squeeze, by allowing them to pump a small fortune into pensions.

The backlash against Hunt's move will hit all of us. If pensions are seen as a massive IHT tax dodge for the rich, it could tempt Reeves to do more than restore the lifetime allowance.

She could make everybody's pensions subject to IHT.

Plenty of people want to see this happen. Last December, the Institute for Fiscal Studies published a paper arguing that the overly generous tax treatment of pension pots at death needs to be swiftly ended.

Thanks to Hunt, that day has just moved closer.

Families have been handed a tax planning nuclear weapon today, and will be clamouring to use it.Unfortunately, Labour has been handed an opportunity to go nuclear on our pensions, too.

If she does, we'll know who to blame. Jeremy Hunt.

I bet he didn't expect that

Sterlingtimes

Albermarle said:

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it

So every SIPP becomes an ISA, uncrystallised or crystallised?

zagfles

Albermarle said:

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

If I was a betting man, then I would say if Labour get in they will not actually in the end reverse the LTA abolition, as it would be too complicated. Plus negative effect on Doctors etc
However including pension pots in IHT calculations ( or partly include over a certain amount for example ) could well be on the agenda.
Even the normally very pro Tory/anti LTA   Daily Express is expressing some reservations. Quote

Labour loves accusing Tory chancellors of helping out their rich mates, so at first I scoffed Shadow Chancellor Rachel Reeves line of attack But the more I look at Hunt's move, the more I see her point. Hunt has just given super-wealthy Britons a massive opportunity to fight back against his own inheritance tax squeeze, by allowing them to pump a small fortune into pensions.

The backlash against Hunt's move will hit all of us. If pensions are seen as a massive IHT tax dodge for the rich, it could tempt Reeves to do more than restore the lifetime allowance.

She could make everybody's pensions subject to IHT.

Plenty of people want to see this happen. Last December, the Institute for Fiscal Studies published a paper arguing that the overly generous tax treatment of pension pots at death needs to be swiftly ended.

Thanks to Hunt, that day has just moved closer.

Families have been handed a tax planning nuclear weapon today, and will be clamouring to use it.Unfortunately, Labour has been handed an opportunity to go nuclear on our pensions, too.

If she does, we'll know who to blame. Jeremy Hunt.

I bet he didn't expect that

The Daily Express! They make the Mail and the Sun look good Have they got bored with freak weather stories and how much house prices are rising per day? I suppose now they're falling they need something else to talk about. Perhaps they need reminding the "super-wealthy" eg those on £360k+ (like company directors, pro footballers and some BBC pundits) can't "pump in" more than £10k a year into their pensions because of the AA taper. But I think that's a bit advanced for the Express.

IHT loophole was clearly deliberate, it started in the coalition days when the Tories wanted to raise IHT threshold but the LibDems blocked it. That would be a good Labour fudge to get around the complication of reintroducing the LTA and be able to avoid claims of backtracking, reintroduce a "cap" but only apply it on inherited pensions. That's what they meant all along. Like Wes meant just the "doctor's" cap

MK62

zagfles said:

Albermarle said:

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

If I was a betting man, then I would say if Labour get in they will not actually in the end reverse the LTA abolition, as it would be too complicated. Plus negative effect on Doctors etc
However including pension pots in IHT calculations ( or partly include over a certain amount for example ) could well be on the agenda.
Even the normally very pro Tory/anti LTA   Daily Express is expressing some reservations. Quote

Labour loves accusing Tory chancellors of helping out their rich mates, so at first I scoffed Shadow Chancellor Rachel Reeves line of attack But the more I look at Hunt's move, the more I see her point. Hunt has just given super-wealthy Britons a massive opportunity to fight back against his own inheritance tax squeeze, by allowing them to pump a small fortune into pensions.

The backlash against Hunt's move will hit all of us. If pensions are seen as a massive IHT tax dodge for the rich, it could tempt Reeves to do more than restore the lifetime allowance.

She could make everybody's pensions subject to IHT.

Plenty of people want to see this happen. Last December, the Institute for Fiscal Studies published a paper arguing that the overly generous tax treatment of pension pots at death needs to be swiftly ended.

Thanks to Hunt, that day has just moved closer.

Families have been handed a tax planning nuclear weapon today, and will be clamouring to use it.Unfortunately, Labour has been handed an opportunity to go nuclear on our pensions, too.

If she does, we'll know who to blame. Jeremy Hunt.

I bet he didn't expect that

I suppose now they're falling they need something else to talk about. Perhaps they need reminding the "super-wealthy" eg those on £360k+ (like company directors, pro footballers and some BBC pundits) can't "pump in" more than £10k a year into their pensions because of the AA taper. But I think that's a bit advanced for the Express.

That's not exactly the case though - the AA taper might restrict the amount of pension contributions those on £360k+pa can get tax relief on to £10k pa, but it doesn't actually restrict the amount they can put into a pension.......that's the crux of this potential "IHT loophole" it appears the chancellor might have created.....

IHT loophole was clearly deliberate,

Perhaps, but as Mr Hunt failed to mention this in his budget speech, we can only guess (as can parliament) - but whatever his intention, this "IHT loophole" makes his budget look even more like a big tax giveaway to the "rich".

zagfles

MK62 said:

zagfles said:

Albermarle said:

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

If I was a betting man, then I would say if Labour get in they will not actually in the end reverse the LTA abolition, as it would be too complicated. Plus negative effect on Doctors etc
However including pension pots in IHT calculations ( or partly include over a certain amount for example ) could well be on the agenda.
Even the normally very pro Tory/anti LTA   Daily Express is expressing some reservations. Quote

Labour loves accusing Tory chancellors of helping out their rich mates, so at first I scoffed Shadow Chancellor Rachel Reeves line of attack But the more I look at Hunt's move, the more I see her point. Hunt has just given super-wealthy Britons a massive opportunity to fight back against his own inheritance tax squeeze, by allowing them to pump a small fortune into pensions.

The backlash against Hunt's move will hit all of us. If pensions are seen as a massive IHT tax dodge for the rich, it could tempt Reeves to do more than restore the lifetime allowance.

She could make everybody's pensions subject to IHT.

Plenty of people want to see this happen. Last December, the Institute for Fiscal Studies published a paper arguing that the overly generous tax treatment of pension pots at death needs to be swiftly ended.

Thanks to Hunt, that day has just moved closer.

Families have been handed a tax planning nuclear weapon today, and will be clamouring to use it.Unfortunately, Labour has been handed an opportunity to go nuclear on our pensions, too.

If she does, we'll know who to blame. Jeremy Hunt.

I bet he didn't expect that

I suppose now they're falling they need something else to talk about. Perhaps they need reminding the "super-wealthy" eg those on £360k+ (like company directors, pro footballers and some BBC pundits) can't "pump in" more than £10k a year into their pensions because of the AA taper. But I think that's a bit advanced for the Express.

That's not exactly the case though - the AA taper might restrict the amount of pension contributions those on £360k+pa can get tax relief on to £10k pa, but it doesn't actually restrict the amount they can put into a pension.......that's the crux of this potential "IHT loophole" it appears the chancellor might have created.....

Yeah, they could pay a 45% AA charge in order to save 40% IHT Brilliant tax planning!

Albermarle

zagfles said:

MK62 said:

zagfles said:

Albermarle said:

MK62 said:

If Labour profoundly disagree with this policy shift, and it appears that they do, then it's not all that surprising that they will oppose it.....at least they are being straight and up front about that........if they win the next election the LTA will be back.
While the dust is still settling on this bombshell, so details probably aren't fully worked out atm, it would be rather helpful in the coming weeks if they fleshed out exactly what they mean, and if their plans will, should they win the next election, include any measures to retrospectively tax anyone who takes advantage of the LTA's charge removal/abolition in the meantime.
I guess it's a case of wait and see......again.....
My own view is that I think it would be unlikely they'd retrospectively tax anyone, and even if they did, that they'd put anyone who takes advantage of the LTA removal in a worse position than today..........but who knows for sure?

If I was a betting man, then I would say if Labour get in they will not actually in the end reverse the LTA abolition, as it would be too complicated. Plus negative effect on Doctors etc
However including pension pots in IHT calculations ( or partly include over a certain amount for example ) could well be on the agenda.
Even the normally very pro Tory/anti LTA   Daily Express is expressing some reservations. Quote

Labour loves accusing Tory chancellors of helping out their rich mates, so at first I scoffed Shadow Chancellor Rachel Reeves line of attack But the more I look at Hunt's move, the more I see her point. Hunt has just given super-wealthy Britons a massive opportunity to fight back against his own inheritance tax squeeze, by allowing them to pump a small fortune into pensions.

The backlash against Hunt's move will hit all of us. If pensions are seen as a massive IHT tax dodge for the rich, it could tempt Reeves to do more than restore the lifetime allowance.

She could make everybody's pensions subject to IHT.

Plenty of people want to see this happen. Last December, the Institute for Fiscal Studies published a paper arguing that the overly generous tax treatment of pension pots at death needs to be swiftly ended.

Thanks to Hunt, that day has just moved closer.

Families have been handed a tax planning nuclear weapon today, and will be clamouring to use it.Unfortunately, Labour has been handed an opportunity to go nuclear on our pensions, too.

If she does, we'll know who to blame. Jeremy Hunt.

I bet he didn't expect that

I suppose now they're falling they need something else to talk about. Perhaps they need reminding the "super-wealthy" eg those on £360k+ (like company directors, pro footballers and some BBC pundits) can't "pump in" more than £10k a year into their pensions because of the AA taper. But I think that's a bit advanced for the Express.

That's not exactly the case though - the AA taper might restrict the amount of pension contributions those on £360k+pa can get tax relief on to £10k pa, but it doesn't actually restrict the amount they can put into a pension.......that's the crux of this potential "IHT loophole" it appears the chancellor might have created.....

Yeah, they could pay a 45% AA charge in order to save 40% IHT Brilliant tax planning!

Would they maybe able to add funds without getting tax relief, so no AA charge ? Not via a mainstream provider but via some more specialist wealth management provider? OK, any withdrawals  would probably be subject to income tax but if it was only being used for inheritance purposes, then it could be a work around for the wealthy ? Not 100% sure if it would work or not.