will grow to £1.055 million.
For private pensions, lifetime allowance is simply the value of the fund at the time you take benefits, although you are allowed to part-crystallise your fund. This applies if you just take the tax-free cash as well. An example of this:
to pay into pensions in the future.
55.8% of lifetime allowance used (current lifetime allowance limit of £1.03 million)
this may change.
you are responsible to report any issues direct to HMRC.
Here is an example of this is:
Tax charge – £20,000 at 45% – £9,000
scheme settle the tax bill, but it does mean that they will reduce your pension when you come to retire.
Although this is a frustrating position and you may question why bother to do extra work just to get caught out by tax charges. The alternative view is you are still earning more money; 55% of something is better than 100% of nothing.You can also look at other avenues on how the income is taken, such as funding your spouse’s pension or VCTs/EISs to reclaim some tax back.
tab on your Step Into Practice dashboard, in the Management and Financial Planning section.
Andrew Johnston DipFA CeMap