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

drjohn67

Looks like Sir K held on to his personalised/one-person special tax benefit for a decade until completely coincidentally he decided to give it back just days after the hypocrisy regarding his position on the LTA was highlighted in the national news.
:-) 

Pat38493

drjohn67 said:

Looks like Sir K held on to his personalised/one-person special tax benefit for a decade until completely coincidentally he decided to give it back just days after the hypocrisy regarding his position on the LTA was highlighted in the national news.
:-) 

I don't think he can actually just "give it back" can he?  You can't just forgo a pension that is in your name instantly.  The linked article doesn't actually say he has cancelled his pension it says he has no intention of "benefitting" from it.  

Of course he could say - when I take the pension I will give all the money to charity or whatever, but then how is he supposed to live in retirement - I am not sure if he has a lot of rich chums who will give him free stuff like a lot of the other party has.

Also I would argue it's not his fault if he got a pension from a job he was doing - presumably he got the standard pension for the role he was doing and didn't have much say in the matter other than opting out completely.  Sounds like this is the same type of pension that judges have.

If they are saying that he should have opted out of the pension if he thought it was unfair, that is a bit ridiculous because nobody in their right mind would do that.

drjohn67

His was a one-person arrangement with HMRC that ended after he left the role with subsequent incumbents accessing the standard civil servant pension. 

It is perhaps because 7 days ago he was criticising the "huge giveaway to the wealthy" that he had himself been awarded 10 years earlier. His admission that he was in receipt of very preferential treatment came after the story broke.

The judge's pension scheme, which his pension mirrored, could be defended as a requirement to recruit the highest candidates to the judiciary. Similarly, his could be defensible. It is just the failure to disclose when being so vocal about others benefitting.

(Not suggesting that any other group of politicians are more trustworthy). 

Malthusian

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

But the Tories have just confirmed they will scrap it again when elected in 2035, while the Gilead Dystopia Party has confirmed that when they are elected in 2050, they will double the Lifetime Allowance for Commanders while all women will have their pensions immediately annulled. 
You heard it here first folks, now you can plan your retirements with confidence.

Albermarle

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

Disregarding the politics of whether it was right or wrong to abolish the LTA, the realpolitik is that a threat to reinstate if will mean a queue of people crystallising large pots before the next election. This will probably be impossible to rewind.
Easier for Labour to look at exemption of pension pots from IHT. This would 
Partly negate the advantages to people of the LTA disappearing.
Not have to be done in a mad rush ( will be complicated I guess involving trust law etc) 
Has the backing already of respected think tanks like the IFS

RogerPensionGuy

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

So politicians continuously poking, kicking, toying and making short-term views and changes to people's long term plans is just so predictable and very unhelpful. 

Since 2005 the government(any) has slowly managed to switch off so many people from sensible pension planing.

If the labour leader is (now) so unhappy with his special pension he should of activated it and paid all the extra cream that he doesn't want to charity or similar. 

Maybe all the judges will do the same.

And in the future, if the NHS staff get special treatments, maybe they will all decide to give to charity. 

Unless labour actually confirm exactly what they will do to pensions some people if possible will use up the 3 years carry forwards AA and do 60K 2023/24 and plonk in 60K April2024 and again box off their pension pot.

Rather than the all the flux now, I would of rathered the LTA was maybe just put to 1.5 or 1.8M and people could plan.

MK62

RogerPensionGuy said:

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

Unless labour actually confirm exactly what they will do to pensions some people if possible will use up the 3 years carry forwards AA and do 60K 2023/24 and plonk in 60K April2024 and again box off their pension pot.

Very likely......while those with average, and below, incomes have their allowances frozen........#in it together...🤔

leosayer

Albermarle said:

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

Disregarding the politics of whether it was right or wrong to abolish the LTA, the realpolitik is that a threat to reinstate if will mean a queue of people crystallising large pots before the next election. This will probably be impossible to rewind.
Easier for Labour to look at exemption of pension pots from IHT. This would 
Partly negate the advantages to people of the LTA disappearing.
Not have to be done in a mad rush ( will be complicated I guess involving trust law etc) 
Has the backing already of respected think tanks like the IFS

Indeed.

Pensions are trust arrangements which are separate legal entities to the beneficiaries.

It's hard to imagine pension pots being included in individual's estates without scrapping DC/SIPP schemes going forward and replacing them with something closer to a Lifetime ISA. This would give the additional benefit of allowing the government to set a fixed rate of tax relief for all.

I don't think the Labour party have a clue about the complexity and damage of what they have committed to with reintroducing the LTA for example:
- Further exemptions for certain doctors will alienate other high earners in the public and private sector
- In the interest of fairness will they allow fixed protection for those with pension pot exceeding the LTA?
- When calculating LTA tax, will previously crystallised pensions need to be accounted for? One the LTA is fully scrapped, I don't expect crystallisation events to exist as a concept any more.
- What will the reintroduction of the LTA and any associated change do to the incentive to save into pensions? 
- Will their commitment further increase the amount of economically inactive people in the meantime and beyond?

After 13 years in power, it has taken that long for the Conservatives to address the fact that certain tax policies, particularly complicated ones like the LTA and AA, nudge people in the direction of doing less work or stopping altogether. 

jaypers

leosayer said:

Albermarle said:

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

Disregarding the politics of whether it was right or wrong to abolish the LTA, the realpolitik is that a threat to reinstate if will mean a queue of people crystallising large pots before the next election. This will probably be impossible to rewind.
Easier for Labour to look at exemption of pension pots from IHT. This would 
Partly negate the advantages to people of the LTA disappearing.
Not have to be done in a mad rush ( will be complicated I guess involving trust law etc) 
Has the backing already of respected think tanks like the IFS

Indeed.

Pensions are trust arrangements which are separate legal entities to the beneficiaries.

It's hard to imagine pension pots being included in individual's estates without scrapping DC/SIPP schemes going forward and replacing them with something closer to a Lifetime ISA. This would give the additional benefit of allowing the government to set a fixed rate of tax relief for all.

I don't think the Labour party have a clue about the complexity and damage of what they have committed to with reintroducing the LTA for example:
- Further exemptions for certain doctors will alienate other high earners in the public and private sector
- In the interest of fairness will they allow fixed protection for those with pension pot exceeding the LTA?
- When calculating LTA tax, will previously crystallised pensions need to be accounted for? One the LTA is fully scrapped, I don't expect crystallisation events to exist as a concept any more.
- What will the reintroduction of the LTA and any associated change do to the incentive to save into pensions? 
- Will their commitment further increase the amount of economically inactive people in the meantime and beyond?

After 13 years in power, it has taken that long for the Conservatives to address the fact that certain tax policies, particularly complicated ones like the LTA and AA, nudge people in the direction of doing less work or stopping altogether. 

I actually don’t think they have a clue, which worries me in respect of the bigger picture, raising questions around competence. I suspect that it will quietly go away in the event of them coming to power but the obvious problem for people it may affect is what to do now in the face of future uncertainty. 

Pat38493

jaypers said:

leosayer said:

Albermarle said:

retiringtoosoon said:

And looks like it will be reintroduced soon after....

https://www.bbc.co.uk/news/uk-politics-65052706

Disregarding the politics of whether it was right or wrong to abolish the LTA, the realpolitik is that a threat to reinstate if will mean a queue of people crystallising large pots before the next election. This will probably be impossible to rewind.
Easier for Labour to look at exemption of pension pots from IHT. This would 
Partly negate the advantages to people of the LTA disappearing.
Not have to be done in a mad rush ( will be complicated I guess involving trust law etc) 
Has the backing already of respected think tanks like the IFS

Indeed.

Pensions are trust arrangements which are separate legal entities to the beneficiaries.

It's hard to imagine pension pots being included in individual's estates without scrapping DC/SIPP schemes going forward and replacing them with something closer to a Lifetime ISA. This would give the additional benefit of allowing the government to set a fixed rate of tax relief for all.

I don't think the Labour party have a clue about the complexity and damage of what they have committed to with reintroducing the LTA for example:
- Further exemptions for certain doctors will alienate other high earners in the public and private sector
- In the interest of fairness will they allow fixed protection for those with pension pot exceeding the LTA?
- When calculating LTA tax, will previously crystallised pensions need to be accounted for? One the LTA is fully scrapped, I don't expect crystallisation events to exist as a concept any more.
- What will the reintroduction of the LTA and any associated change do to the incentive to save into pensions? 
- Will their commitment further increase the amount of economically inactive people in the meantime and beyond?

After 13 years in power, it has taken that long for the Conservatives to address the fact that certain tax policies, particularly complicated ones like the LTA and AA, nudge people in the direction of doing less work or stopping altogether. 

I actually don’t think they have a clue, which worries me in respect of the bigger picture, raising questions around competence. I suspect that it will quietly go away in the event of them coming to power but the obvious problem for people it may affect is what to do now in the face of future uncertainty. 

My guess is that if they come to power they will announce a review to report in x months or years from now on the best way to handle it.  A lot of what is happening now is mud slinging in the run up to the local elections (and soon to come GE)