Lifetime allowance abolition

LTA latest update

The lifetime allowance was abolished on 6 April 2024. However as you may be aware, there have been some challenges faced by platforms, advisers and clients in navigating the new rules due to delays receiving guidance from HMRC.
 
On 4 April 2024, HMRC released a newsletter in which it advises some clients to delay taking benefits, or transferring their pension until it can remedy incorrect legislation.
 

HMRC advise that certain groups of people should delay action until regulations are passed through Parliament to correct the legislation.

Those affected by HMRC’s advice relate to any cash which involves:

• scheme specific tax-free cash protection
• a transfer of a case with enhanced protection
• enhanced protection and primary protection cases with protected lump sum rights of more than £375,000
• the payment of a lump sum death benefit from funds which crystallised before 6 April 2024
• any transfer from drawdown to a QROPS
• any transfer to a QROPS which involves pre-April 2006 benefits.

In respect of the above cases, HMRC advise that ‘schemes should advise members to request a delay to the payment/defer their request to transfer’.

Therefore, if you have a client impacted by the above events, please contact us to agree next steps and to provide confirmation as to whether you wish to proceed with the previously provided instruction.