Changes to Annual Allowance and Lifetime Allowance tax controls
on 22 March 2023 11:31
In the Spring 2023 budget, the Chancellor announced changes to both the Annual Allowance and Lifetime Allowance tax controls. These changes were as follows:-
- The Pension Input Amount (the amount your pension can grow each year) has been increased from £40,000 to £60,000.
- The Lifetime Allowance of £1,073,000, which was the amount of pension you could build up before a tax charge applied, will be removed and there will be no tax charges with effect from 6 April 2023.
- Increase the income level for the tapered Annual Allowance to apply from £240,000 to £260,000.
- Limit the maximum an individual can claim as a lump sum to 25% of the current Lifetime Allowance (£268,275), except where protections apply.
- Change the taxation of the Lifetime Allowance excess lump sum where they are currently subject to a 55% tax charge above the LTA, to taxation at an individual's marginal rate.
We will provide information further for our members in our 2023 annual updates.
Last modified: 27 March 2023 12:54