Lifetime savings limits
Do you need to register by 5 April 2009?
Following 'A' Day on 6 April 2006, new rules now place an overall lifetime limit on tax-advantaged pension funds of £1.6m (2007/08).
That limit is to increase each year until 2010, when it will reach £1.8m. There is a tax charge for value in excess of the limit at retirement and for excess contributions in a year over the annual limit, which this year is £225,000.
Transitional arrangements protect those who have already reached the 'lifetime' savings limit at 5 April 2006, but protection needs to be registered by 5 April 2009.
| Tax Year | 07/08 | 08/09 | 09/10 | 10/11 |
| Annual amount (input amount) |
£225,000 | £235,000 | £245,000 | £255,000 |
| Tax charge on excess | 40% | 40% | 40% | 40% |
| Lifetime allowance | £1.6m | £1.65m | £1.75m | £1.8m |
| Tax charge (excess paid as annuity) | 25% on excess value, then up to 40% on annuity | |||
| Tax charge (paid as lump sum) | 55% on excess value | |||
Need more information? Please email or contact us with your enquiry.
Levels and bases of, and reliefs from, taxation are subject to change.
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