The devil is always in the detail. Yes, the pension lifetime allowance has been abolished; possibly temporarily if Labour keep it on their list of stuff to un-abolish, if and when. The amount of tax-free cash you can take if you’re lucky enough to have a giant pension fund is still ‘capped’ at 25% of the current (now-abolished) lifetime allowance. And on death, if the pension is above the (now-abolished) lifetime allowance, those who receive it will have, instead of a ‘lifetime allowance’ tax charge, income tax based on the tax position of the recipients, the family or beneficiaries. The pension providers who would have had to collate and police this have protested at the delays this would cause, and so for the moment the idea has been dropped. As always, particularly where pensions are involved, ‘simplification’ adds yet more layers of complexity, eyes glaze over, and yet more wonder: ‘why bother?’
“HMRC scraps plans to tax pensions after death”
A couple of other Statement Highlights (in my world, anyway). A welcome ‘nothing happened’ on the treatment of pensions on death. They were never going to be liable to IHT (too complicated with trusts and trust law) but there was talk of making them income-taxable on the recipients at whatever age you die.
