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Have you considered which clients should consider applying for fixed protection, asks ALLISON PLAGER
KEY POINTS
- Lifetime allowance reduces to £1.5m on 6 April 2012.
- Fixed protection claims must be made by 5 April 2012.
- Value of pension benefits.
- Make use of contribution limits.
- Consider all options.
Recent press speculation that the government is considering abolishing higher rate tax relief for pension contributions may have taken the spotlight off the imminent reduction in the lifetime allowance (LTA) for pension savings.
This will be reduced from £1.8m to £1.5m on 6 April 2012 and after this date savers who accumulate more than £1.5m will incur a tax charge when they take their benefits.
In brief the excess amount will attract tax at 55% if it is taken as a lump sum and 25% if paid as a pension. As Stephen Woodhouse an...
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