Lifetime allowance charge meaning

In this issue: Companies and corporation tax Stamp taxes VAT Individuals and income tax Taxes management and litigation Employment taxes Budget and Finance Bills Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Companies and corporation tax Court of Appeal decides interest on intra-group loans not restricted under transfer pricing rules but debits disallowed under unallowable purpose rule (BlackRock Holdco 5, LLC v HMRC) BlackRock Holdco 5, LLC v HMRC [2024] EWCA Civ 330 considers whether, for UK tax purposes, interest on intra‑group borrowing put in place to help fund a commercial acquisition is deductible. Two principal points were before the Court of Appeal: the transfer pricing analysis and the loan relationships unallowable purpose question. On the transfer pricing limb, the Court of Appeal allowed the taxpayer’s appeal. As a result, deductions for interest on the intra‑group loans were not curtailed by the transfer...

In this issue: Pensions allowances Mansion House speech Types of pension arrangements Daily and weekly news alerts Dates for your diary Trackers Pensions allowances Coming into force of two tax regulations making corrections to the lifetime allowance abolition provisions As anticipated, two regulations commenced on 18 November 2024, applying retrospectively from 6 April 2024, to fix provisions relating to the abolition of the lifetime allowance. The first is the Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024, SI 2024/1012. Among other measures, they: require members to give all pension scheme administrators a copy of their transitional tax-free amount certificate (TTFAC) and to notify them if it is cancelled permit members to transfer pension savings while keeping any lump sum protection available under their enhanced protection adjust the transitional rules for the overseas transfer allowance so funds crystallised into drawdown before 6 April 2024 are not counted twice if moved...

Summary of changes From 1 April 2024: new rules for calculating holiday entitlement and pay for irregular hours and part‑year workers (including 12.07% accrual and an option to use rolled‑up holiday pay); annual National Living Wage/National Minimum Wage uplift and removal of the live‑in domestic worker exemption; higher Agricultural Minimum Wage rates in Wales; and increased VAT registration (£90,000) and deregistration (£88,000) limits. From 6 April 2024: flexible working becomes a day‑one right with revised processes and an updated Acas Code; paternity leave/pay reformed so two separate one‑week blocks can be taken within the first year; introduction of unpaid carer’s leave; extended redundancy protection during pregnancy and for a period after family leave; Employment Tribunal rule changes and higher compensation caps; uplifted Vento bands; higher SSP; Class 1 main employee NIC cut to 8% while weekly thresholds (including the £123 LEL) remain static; veterans’ employer NIC relief extended; van benefit and car/van fuel benefits frozen; higher high income child benefit charge threshold with tapered application; and...

Overview of the types of death in service benefits and their tax treatment Employers can provide three common kinds of death in service protection, often described as ‘life assurance’ or ‘life cover’, by arranging a life policy for their staff who are eligible: the registered group life policy the relevant life policy the excepted group life policy These arrangements share the following common features and conditions: employees eligible for cover must be aged from 16 to 74 inclusive using a discretionary trust will normally prevent any inheritance tax (‘IHT’) charge arising on an employee’s death premiums paid by the employer are usually deductible for tax premiums are not treated as a taxable benefit in kind for employees The registered group life policy This is a group arrangement that is registered with HMRC under Part 4 of the Finance Act 2004 (FA 2004). It provides employers with a flexible way to meet...

Being a member of an occupational or personal pension scheme allows individuals to utilise tax reliefs throughout their working life to build a retirement pension. This Practice Note outlines, in broad terms, the principal areas where members can maximise available tax reliefs to improve their retirement benefits. It highlights the following features and, where relevant, flags certain pitfalls to avoid: pensionable earnings personal contributions their interaction with the annual allowance Previous discussions of these topics would have referred to the lifetime allowance charge and the lifetime allowance; the lifetime allowance charge was abolished with effect on and from 6 April 2023, and the lifetime allowance itself was abolished with effect on and from 6 April 2024. Further information is available at PTM164100 - Information and administration: overview of the information requirements in respect of the lifetime allowance. Pensionable earnings For employer and individual contributions to registered pension schemes to attract tax relief, those contributions must be calculated by reference to...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...