In the second week of Wimbledon, what behaviours does the LTA encourage?

In last week’s blog, I discussed why it is time to scrap the LTA.  I have compiled a list of behaviours which could be attributed to the (potential) impact of the Lifetime Allowance.

1. A reshaping of final salary benefits – perhaps by accepting a higher dependant’s pension – to reduce tax rather than to reflect individual lifestyles

2. A lower risk investment strategy, as the benefit of any upside is eroded by the Lifetime Allowance tax charge

3.  Needlessly reducing pension contributions for fear of breaching the Lifetime Allowance (or perhaps more likely as a reaction to distrust of government not to reduce allowance further)

4. Lapsing life cover set up under a pension wrapper, to avoid loss of Fixed Protection

5.  Vesting benefits earlier than needed, to trigger the Lifetime Allowance test

6. Or a transfer to QROPS in advance of non-residency, simply to trigger the Lifetime Allowance test early

7. Keeping pensions spread across multiple arrangements, as in some cases total benefits can be more tax efficient

8. Use of some perhaps speculative arrangements to spread pension savings across more than one person


In next week’s blog, I’ll attempt to set out how the LTA can be scrapped.


I'd love to hear your thoughts

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s