You may be aware that HMRC have issued updated guidance on the Pension Lifetime Allowance, and specifically how to work out the pension value, as well as apply for protection from the lifetime allowance reduction.
The key point to note is that this is more a tidying up exercise by HMRC as a response to comments from the market that they’ve not issued updated guidance for some time. Having said that, nothing has changed and the issue with death in service benefit claim proceeds reducing the individual life time allowance remains. So there is still a good reason to discuss Relevant Life Cover with your clients.
1) Lifetime allowance protection – valuing benefits
HMRC issued updated guidance on how to value pension benefits for Individual Protection 14 and 16.
https://www.gov.uk/guidance/pension-schemes-value-your-pension-for-lifetime-allowance-protection
2) Lifetime allowance – application for protection
HMRC issued details of the new application process.
https://www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance
We’d previously discussed the opportunities that the reduction in the LTA provides advisers in the third of our series of monthly articles in Cover Magazine (see link below).
