Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Exit charge definition

What does Exit charge mean? An exit charge is the inheritance tax that can arise when settled property within the relevant property regime leaves a trust or otherwise ceases to be relevant property. In UK practice (Inheritance Tax Act 1984, especially ss 64–68), it typically occurs on a distribution to a beneficiary, an appointment giving a beneficiary absolute entitlement, or a transfer of value out of a discretionary or other relevant property settlement, other than on excepted occasions specified in the legislation. The charge is calculated by reference to the trust’s effective rate at the last ten‑year (periodic) charge, adjusted for the time since...

Early exit pension charge cap: legislative and regulatory framework, definitions and implementation for personal, stakeholder and occupational schemes, including 1% cap for existing members and 0% ban for new arrangements

Published by a LexisNexis Pensions expert

Practice notes

FORTHCOMING DEVELOPMENT :

Section 10 of the Finance Act 2022 is set to raise the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028, excluding members of the public service pension schemes for firefighters, police and the armed forces. The Finance Act 2022 will also grant members of registered pension schemes the ability to access their benefits before reaching age 57 if, on or before 4 November 2021, they either held an ‘unqualified right’ to take benefits or were already in the course of a substantive transfer to a scheme offering an unqualified right to a protected pension age below 57 on or before 4 November 2021. To make effective use of this new 2028 protection, the scheme’s rules must, as at 11 February 2021, have included an unqualified right to take the entitlement to scheme benefits before age 57. For further information, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. Since 31 March 2017, a cap has applied to early exit charges in personal pension schemes and stakeholder pension schemes. This cap was extended to occupational pension schemes with effect from 1 October 2017. What is an early exit charge?...

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Web page updated on 21/05/2026

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