Lifetime allowance and PCLS

Albermarle

jamesd said:

Given the high probability of that particular event it does seem prudent to me. It would be possible to wait until the election result instead but then pension firms are likely to be very busy. Labour have been clear about their intent with details and timing the uncertainties.

The money doesn't necessarily stay in a taxable environment. ISA is obvious but for some people VCTs are suitable.

If you take a look around online you'll find extensive discussion of the choices.

As said personally I would think that changes to the generous tax regime surrounding pensions after death is more likely. The IFS have published a couple of papers highlighting these benefits which could be used as a blueprint by Labour. Possibly easier to introduce than a reintroduction of LTA, although the current status of DC pension pots as trusts would probably be tricky to change legally. Complicated anyway.

jamesd

Just try a web search for more You'll probably find a fair bit in the Financial Times.

Regrettably this is a case where the result isn't certain and part of the exercise is minimising regret at the missed saving opportunity.

You might consider waiting until after the Budget on 6 March but by then you're already in peak season for firms.

In essence, crystallising now makes it harder for a Labour government to write law that can catch what you've done.

But do be aware that while this sort of planning looks good we could see the 6 April 2024 changes still in place five years later even if Labour prevails.

jamesd

Albermarle said:

 personally I would think that changes to the generous tax regime surrounding pensions after death is more likely. 

Entirely possible and this government is already doing so in the death before age 75 case by reducing the amount from 100% tax free to only a quarter of a million.

Albermarle

jamesd said:

Albermarle said:

 personally I would think that changes to the generous tax regime surrounding pensions after death is more likely. 

Entirely possible and this government is already doing so in the death before age 75 case by reducing the amount from 100% tax free to only a quarter of a million.

I understood from other threads on the subject that this was in the original proposal, but the latest proposals have gone back to 100% tax free. As the proposals are all in legal lingo it is difficult to be 100% sure though.

RogerPensionGuy

https://www.pensionsage.com/pa/Amendments-to-finance-bill-strong-signal-of-labours-plans-to-reverse-lta-changes.php
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https://www.lcp.com/media-centre/2023/11/reinstating-lifetime-allowance-fraught-with-difficulties

RogerPensionGuy

https://www.financialadvice.net/will_labour_bring_back_the_lifetime_allowance_and_how/video/2004/32
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https://henrytapper.com/2023/11/06/lcp-explain-the-peril-of-reinstating-the-lifetime-allowance/
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https://www.moneymarketing.co.uk/opinion/steve-webb-what-a-lifetime-allowance-return-under-labour-could-look-like/

Mutton_Geoff

There may be some people approaching retirement who haven't paid particular attention to their schemes until now who could be eligible for IP2016 (up to £1.25m) if their pension pot was valued above £1.078m at that time thus enabling more TFC to be taken (up to £312,500, 25% of £1.25m).

I believe you can still apply for IP2016.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm094210

jamesd

Albermarle said:

jamesd said:

Albermarle said:

 personally I would think that changes to the generous tax regime surrounding pensions after death is more likely. 

Entirely possible and this government is already doing so in the death before age 75 case by reducing the amount from 100% tax free to only a quarter of a million.

I understood from other threads on the subject that this was in the original proposal, but the latest proposals have gone back to 100% tax free. As the proposals are all in legal lingo it is difficult to be 100% sure though.

Thanks, you're right, this proposal was withdrawn in the 2023 Autumn Statement. Still, ît does tend to suggest that this area isn't sacrosanct.