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HMRC has responded to feedback on the abolition of the pension lifetime allowance rules. Detailed guidance has been published and amendments will be made to the legislation, effective from 6 April 2024.
HMRC’s latest Lifetime allowance guidance newsletter contains further guidance on the implications of the pensions lifetime allowance abolition. The guidance includes 38 frequently asked questions, some of which have been informed by feedback from working groups.
The guidance covers a number of areas, including protections and enhancement factors; reporting requirements; transitional tax-free amount certificates; and the standard transitional calculation.
The legislation to complete the abolition of the lifetime allowance is included in Finance Act 2024 (FA 2024). However, HMRC has confirmed that it will make changes to FA 2024 and other legislation through regulations, effective from 6 April 2024.
This includes changes to:
- lump sums and lump sum death benefits;
- protections and enhancement factors;
- pension commencement excess lump sum (PCELS);
- enhanced protection;
- primary protection; and
- the overseas transfer allowance.
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