Announcement 14 October 2010 Draft clauses for the Finance Bill 2011
issued on 9 December 2010 with explanatory notes. Finance Bill and response to consultation issued 31 March 2011. Lifetime allowance changes expected to have effect from 6 April 2012
Draft lifetime allowance guidance issued 9 December 2010
Draft regulations issued May 2011
Consultation ends on 24 June 2011
The draft Registered Pension Schemes (Lifetime Allowance Transitional Protection) Regulations 2011
The draft Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2011
The draft Registered Pension Schemes (Authorised Payments) (Amendment) Regulations 2011
The draft Taxation of Pension Schemes (Transitional Provisions) (Amendment No.2) Order 2011
The lifetime allowance will be reduced to £1.5million on 6 April 2012.
The 9 December 2010 notes confirm that those with savings above £1.5million, or who believe the value of their pension pot will rise above £1.5million through investment growth without further contributions, may apply for a personalised lifetime allowance of £1.8million provided that they cease accrual in all registered pension schemes before 6 April 2012. Notification of ceasing accrual must be received by HMRC by 5 April 2012.
The response to consultation confirms that individuals claiming the new "fixed protection" will have a maximum tax free lump sum of 25% of £1.8m. Draft regulations have been issued to make consequential amendments to tax regulations relating to the reduction of the lifetime allowance which will:
- set out the requirements for an individual to apply for the new fixed protection from the reduced lifetime allowance;
- set out the requirements for members and scheme administrators when a member with fixed protection takes their benefits.