More clients than ever could face a 55% tax through breaching the lifetime allowance. Fiona Murphy asks advisers about the issues and action to take
Some 360,000 people will be hit by the latest lifetime allowance (LTA) reduction and 140,000 people will be hit by the annual allowance (AA) change, according to Treasury estimates. Breaching the LTA can mean a 55% charge on any lump sum above the LTA or a 25% charge if no lump sum is taken. Anyone who exceeds the AA limit plus any unused annual allowance carried forward from the three previous tax years will also be taxed. This has been the second time contribution limits have been cut under the Coalition's watch. Advisers are left on the frontline, explaining to more people they wil...
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