Lifetime allowance - explainations wanted please :)

Avro1995

Hi all, really trying to brush up and fully understand the LTA both past and present. Although I understand from next year it is meant to be totally gone I want to get my head round how it worked previous to the current tax year and how its working right now till April. 

How is and was the tax charge paid? Is it deducted from the fund? Do you pay it through paye or tax returns? 

When does and did it actually get tested in most cases?

How does it work with DB and DC schemes together and alone. 

I know this is a very broad questions but if anyone could give some worked out examples of when it would and wouldn't be payable and how it would be paid if it was that would really help my understanding of this!

Thank you so much

Marcon

Avro1995 said:

Hi all, really trying to brush up and fully understand the LTA both past and present. Although I understand from next year it is meant to be totally gone I want to get my head round how it worked previous to the current tax year and how its working right now till April. 

How is and was the tax charge paid? Is it deducted from the fund? Do you pay it through paye or tax returns? 

When does and did it actually get tested in most cases?

How does it work with DB and DC schemes together and alone. 

I know this is a very broad questions but if anyone could give some worked out examples of when it would and wouldn't be payable and how it would be paid if it was that would really help my understanding of this!

Thank you so much

There's plenty of information on the internet if you google on Lifetime Allowance, so not sure what else you need. There's no point anyone here regurgitating for the sake of it. Some of best explanations are those issued by the very large pension schemes, so have a look at those - the links will pop up when you google.

What's the purpose of your question? As you say, you are asking a range of broad questions and knowing why you need the info might help others to answer more helpfully than would otherwise be the case.

NoMore

Totally agree with Marcon, here's a useful link for you - Techzone (abrdn.com)

RogerPensionGuy

The links below maybe helpful, I'm interested to know why the OP has asked this question?

I called it and still call it "Football LTA" the AA (annual allowance) joined the game also, this Football game has unfortunately switched many people off from getting more involved in pensions as its been hard to understand it these past 18 years, hopefully they will just leave the LTA well alone for at least 10 years or more so people can start to understand and plans feeling somewhat confident.
.
.
https://adviser.royallondon.com/technical-central/rates-and-factors/standard-lifetime-allowance/
.

https://www.unbiased.co.uk/discover/pensions-retirement/managing-a-pension/what-is-the-pension-lifetime-allowance-and-how-does-it-work