Income tax on pensions scheme lump sums

Key points

• The lifetime allowance charge was abolished from 6 April 2023.
• The lifetime allowance was abolished from 6 April 2024 when the three new allowances came in.
• The new rules are in FA 2024 Sch 9 the Pensions (Abolition of Lifetime Allowance Charge etc) Regulations SI 2024/356 and other amended SIs.
• Complexities for clients with benefit crystallisation events under the old regime.
• Various protections and enhancements to the lifetime allowance continue to apply within the new regime.

This is the first of three articles on income tax on cash lump sums withdrawn from registered pension schemes lump sum death benefits arising to beneficiaries from such schemes and international pension scheme transfers post 5 April 2024.

It is a very complex subject regarding which members of the public and existing clients may want to have a dialogue about their options. They may be approaching retirement from work...