HMRC’s Pensions Schemes Newsletter 148 provides a useful summary of the pensions tax changes proposed in the Spring 2023 Budget, including:
lifetime allowance tax charge removed from 6 April 2023 (although the LTA will remain on the statute book until April 2024);
pension commencement lump sum limit formally set at £268,275 (25% of the current LTA) - this is not a new limit, but preserves the 25% policy following abolition of the LTA;
various lump sum payments currently subject to a 55% LTA tax charge instead taxed at the individual’s marginal tax rate from 6 April 2023;
annual allowance increased to £60,000, with the minimum (after taper, for high earners) increased to £10,000 from 6 April 2023;
top-up payments for those who lose out as a result of their pension scheme operating net pay arrangements to be made for 2024/25 onwards (payable ‘as soon as possible after the tax year in which the contribution is paid’); and
draft legislation enabling the digitalisation of relief at source to be published for consultation later in 2023.
HMRC’s Pensions Schemes Newsletter 148 provides a useful summary of the pensions tax changes proposed in the Spring 2023 Budget, including:
lifetime allowance tax charge removed from 6 April 2023 (although the LTA will remain on the statute book until April 2024);
pension commencement lump sum limit formally set at £268,275 (25% of the current LTA) - this is not a new limit, but preserves the 25% policy following abolition of the LTA;
various lump sum payments currently subject to a 55% LTA tax charge instead taxed at the individual’s marginal tax rate from 6 April 2023;
annual allowance increased to £60,000, with the minimum (after taper, for high earners) increased to £10,000 from 6 April 2023;
top-up payments for those who lose out as a result of their pension scheme operating net pay arrangements to be made for 2024/25 onwards (payable ‘as soon as possible after the tax year in which the contribution is paid’); and
draft legislation enabling the digitalisation of relief at source to be published for consultation later in 2023.
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