HM Revenue & Customs (HMRC) has issued its latest pension scheme newsletter providing a reminder that the window for applying for Fixed Protection 2014 (FP2014) closes on 5 April 2014. The guidance for Individual Protection 2014 (IP2014) has also been updated.
In addition, HMRC has strengthened its existing pension scheme registration and transfer processes as part of its continuing strategy to combat pensions liberation.
FP2014 is available to individuals who, by 6 April 2014, do not have any of the existing lifetime allowance (LTA) protections – that is, primary, enhanced or fixed protection 2012. Individuals with one of these protections should check that the particular protection they have remains valid. If the existing protection is lost before 6 April 2014, then an application for FP2014 may still be made, providing a LTA of £1.5 million from 2014-15 onwards. There is an online tool to help individuals decide whether they should apply for FP2014, together with an online form for the application itself.
As well as FP2014, a separate form of personalised protection will be introduced from 6 April 2014 for individuals with rights in excess of £1.25 million on 5 April 2014. Individual Protection 2014 (IP2014) permits a personalised LTA equal to the value of the individual’s pension savings on 5 April 2014, subject to an overall maximum lifetime allowance of £1.5 million. Unlike FP2014, IP2014 will not prohibit further accruals or contributions. There is a three-year period to claim IP2014, with the deadline for a claim falling on 5 April 2017. The guidance for IP2014 was updated on 7 February 2014, and is available on HMRC’s website.
HMRC continues to deter pensions liberation by making a number of changes to the processes relating to pension scheme registration and pension transfers. Further details are available in the newsletter.
View newsletter no. 60.