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LTA-Day tax changes

6 April 2024 marked the end of the lifetime allowance (LTA). The original timeframe for making the required changes was extremely tight, with two sets of amending regulations coming into force as recently as November 2024.

With further updates to HMRC guidance still expected, checking pensions systems and processes to ensure they are up to speed remains a 2025 priority.

Death benefits and “unused DC pots” to become subject to IHT?

At the Autumn Budget, the Chancellor, Rachel Reeves, announced that most authorised death benefits, including DB lump sum death benefits, will become subject to inheritance tax (“IHT”) from April 2027. From the same date, “unspent” DC pots will fall within individual’s estates for the purposes of calculating their IHT liability.

Government plans for DB surplus

The Government is planning to make changes to allow “trapped surplus funds to be invested in the wider economy” by making it easier for trustees to return surplus to their sponsoring employers. Details of its surplus policy will be published this spring, as part of the DWP’s response to its February 2024 consultation on options for DB schemes.

Briefings

LTA-Day tax changes

Death benefits and “unused DC pots” to become subject to IHT?

Government plans for DB surplus

Quarterly briefing – September 2020

DC briefing – August 2020

PODCAST : DB to DC transfers, member concerns – August 2020

PODCAST : DC Chair’s statements – August 2020

GMP equalisation and data “gaps”

Diversity – what does it mean for pension trustees?

Equalising for the effect of GMPs – when is a limit not a limit?

Corporate briefing – July 2020

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