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HMRC publishes over 100 FAQs on lifetime allowance abolition

Author: ICAEW Insights

Published: 29 Apr 2024

HMRC has published an update for pension scheme administrators on a range of issues, including the abolition of the lifetime allowance (LTA).

HMRC has provided further guidance on the abolition of the LTA in the latest issue of its pension schemes newsletter. This includes five scenarios that clarify the treatment of benefits paid after 6 April 2024 where the individual became entitled to them before that date.

With help from pension scheme administrators, HMRC has identified some technical errors in the legislation. This includes lump sum death benefits and transitional calculations. Legislation will be brought forward to correct the errors.

HMRC has also published a consolidated version of frequently asked questions (FAQs) relating to the abolition of the LTA. Some FAQs have been updated to reflect changes to the rules that will be made by further regulations. Pension scheme members may need to wait until the further regulations are in place before taking or transferring certain benefits. 

Where a member is affected by these changes, and will suffer financial hardship as a result, the pension scheme administrator may email HMRC (including ‘LTA further regulations — impacted member’ in the subject line).

Other areas covered in the newsletter include:

  • the submission of the relief at source annual return for 2023/24;
  • filing event reports using the managing pension schemes service; and
  • the tax treatment of interest paid in connection with the public service pensions remedy.
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