Autumn Statement

The Chancellor gave his Autumn statement last week. Among the many accompanying policy papers was one confirming the Government’s continued commitment to abolish the pension Lifetime Allowance from April 2024.

The legislation is still to be released confirming the full details, but the policy paper did confirm the following:

• The maximum amount of lifetime tax free cash will be 25% of an individual’s accumulated fund with a ceiling of £268,275. This is in line with the current 25% of the standard lifetime allowance.
• Tax Free Lump Sum Death Benefits and Tax Free Lump Sums will be tested against a Lump Sum Threshold of £1,073,100 which is the current standard lifetime allowance.
• Individuals with valid pension protection will retain their higher protected lifetime allowance and tax-free lump sum entitlement.
• Eligible individuals will have until 6 April 2025 to apply for Fixed Protection 2016 and Individual Protection 2016. This is a higher lifetime allowance of £1,250,000 provided you have had no pension contributions or pension accrual since 5^thApril 2016.
• Anything over the lump sum allowance/threshold will be taxed at an individual’s marginal rate of income tax.
• Beneficiary drawdown paid following the death of an individual under the age of 75 will continue to be paid free of income tax.
• A new ‘overseas transfer allowance’ will be introduced for transfers to QROPS.