Chris Holmes (BDO) and Catherine Morgan (Consilio Consulting) provide a refresher on the workings of this allowance.
For more than three decades successive governments have sought to encourage everyone to save for their retirement and pensions tax relief has been a critical part of the strategy.
However in acknowledgment that pensions attract exceptionally generous tax reliefs (which cost the exchequer £42.7bn in 2020/21) restrictions have been placed on pension savings. Initially only annual contributions were capped – currently by way of the annual allowance (AA) – but in 2006 the lifetime allowance (LTA) was introduced to effectively restrict the total amount a person can save for their retirement tax-free (FA 2004 s 214).
Since the LTA was introduced at £1.5m it has increased and decreased seemingly at the whim of chancellors. After reaching £1.8m for 2010/11 and 2011/12 it is...
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Chris Holmes (BDO) and Catherine Morgan (Consilio Consulting) provide a refresher on the workings of this allowance.
For more than three decades successive governments have sought to encourage everyone to save for their retirement and pensions tax relief has been a critical part of the strategy.
However in acknowledgment that pensions attract exceptionally generous tax reliefs (which cost the exchequer £42.7bn in 2020/21) restrictions have been placed on pension savings. Initially only annual contributions were capped – currently by way of the annual allowance (AA) – but in 2006 the lifetime allowance (LTA) was introduced to effectively restrict the total amount a person can save for their retirement tax-free (FA 2004 s 214).
Since the LTA was introduced at £1.5m it has increased and decreased seemingly at the whim of chancellors. After reaching £1.8m for 2010/11 and 2011/12 it is...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
