Reply to: Pension allowance increase to 60K

[jamesbrown]

Anyone think any real risk Labour will retro tax the difference between 40K and 60K if they get in?

Retrospectively tax anything above 40k in each year?

No chance. It would be an administrative nightmare and it would undermine the tax system in a way that the retrospection associated with "aggressive tax avoidance" doesn't - Labour is unlikely to want to create that chaos among a skeptical public. However, they'll certainly reverse the lifetime allowance and the extra 20k prospectively - both are stated policy AFAIK.

[sadkingbilly]

Anyone think any real risk Labour will retro tax the difference between 40K and 60K if they get in?

almost certainly

[Keanu2020]

Anyone think any real risk Labour will retro tax the difference between 40K and 60K if they get in?

[Lance]

It won't stay under a labour government.
The new rules, it would seem, will allow for unlimited inheritance without IHT if you die under 75. That is not gonna stay.

What pisses me off is using pensions as a political football. Make the lifetime limit £1.5M or £2M will sort the issue with doctors, but scrapping it is just a tax break for the moderately wealthy.

[Smoggy]

From 6 April 2023 the LTA still technically exists but if you exceed it the charge is calculated at 0%. From 2014 it won't exist at all. End result is the same.

[jamesbrown]

https://www.telegraph.co.uk/pensions...r-2023-budget/



What does that mean then?

It’s a technicality. I’m not sure whether it’s a legislative technicality related to the FA or to help pension schemes adjust but, either way, the lifetime limit is effectively gone as of 6 April 2023.

[Maslins]

https://www.telegraph.co.uk/pensions...r-2023-budget/

What does that mean then?

Our understanding is for the next year, technically the lifetime limit is still there, but there's no penalty for going over it. From the following year, the lifetime limit itself is removed.

[ladymuck]

All of these changes apply from 6 April 2023.

https://www.telegraph.co.uk/pensions...r-2023-budget/

The lifetime allowance (LTA) caps the amount that workers could save into their pension tax-free at £1.073m. However, the LTA charge will now be removed starting from April 2023, and abolished entirely from April 2024.

What does that mean then?

[jamesbrown]

I read somewhere that the lifetime cap change doesn't kick in until 2024, less than a year before the next GE, is that the same for the annual allowance?

All of these changes apply from 6 April 2023.

[ladymuck]

I read somewhere that the lifetime cap change doesn't kick in until 2024, less than a year before the next GE, is that the same for the annual allowance?

[eek]

they will overturn the removal of the lifetime cap. Not sure they'll reduce the annual cap.

£60,000 is basically where it should be if it had increased by inflation.

Lifetime cap will likely return. And the 25% tax fee lump sum will be kept at £250,000 for evermore.

[Lance]

Labour will overturn it when they get in next year.

they will overturn the removal of the lifetime cap. Not sure they'll reduce the annual cap.

[Fred Bloggs]

Labour will overturn it when they get in next year.

Indeed. They have already said so.

[Dark Black]

Labour will overturn it when they get in next year.

[ladymuck]

I wouldn't expect the annual limit to be applied retrospectively. 40k for past years, 60k going forward from the new tax year