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Lifetime allowance - abolished, but not quite!

Emily Campbell has written an article on the abolition of the lifetime allowance, cataloguing the various materials published since the Budget, with particular reference to lump sum benefits, and posing the question: is the lifetime allowance actually abolished - or just renamed?

To read the article, click on the pdf below.

InFocus EC3
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Very interesting article. If the legislation is enacted as published , an individual's lump sum position has improved compared to the position pre 06/04/2024. Any BCE prior to 06/04/2024 will only count towards a amount of 25% of the new LSDBA under the default scenario.

Say I have previously used 100% of my LTA, I die in June 2024 , my available LSDBA is

[25% (100% x £1,073,100) = £268,275 ] £1,073,100 - £268,275 = £ 804,825.

Whereas under the existing rule any lump sum payment of uncrystallised or pension death in service would incur income tax at a marginal rate for the beneficiary.

In addition, any designation in to drawdown of uncrystallised funds in the new world is not…

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