Lifetime allowance

Produced by Tolley in association with

Employment Tax

Guidance

This guidance note looks at the lifetime allowance which applied until 5 April 2024. The lifetime allowance charge was removed from 6 April 2023 and the lifetime allowance itself was abolished from 6 April 2024. For details of the replacement system for taxation of pension lump sums, see the Pension income and lump sum allowances from 6 April 2024 guidance note.

Introduction

A lifetime limit on the total amount of pension value that can benefit from tax relief was introduced with effect from 6 April 2006, with a lifetime allowance charge being levied on any excess over this lifetime allowance.

This lifetime allowance charge was abolished with effect from 6 April 2023. When any pension value in excess of the lifetime allowance is taken, it is

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