In recent times, UK Governments have never failed to resist the temptation to modify the pensions tax regime - and this year is no exception! For the third time in four years, the Government is reducing the maximum pension accumulation (known as the Standard Lifetime Allowance “SLA”) that can be accumulated without tax for an individual – unless some “Protection” is in place.
From 6th April 2016, the SLA will be reduced to £1 million from the current £1.25 million level. Any excess funds accumulated over the SLA (or a previously protected higher limit) will be subject to a “Lifetime Allowance Charge” of 25%, levied at a “benefit crystallisation event”.
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