UK Pensions Update
It doesn’t come as much as a surprise that UK pensions are under further attack from the UK! These proposed changes are now under discussion and set to be implemented in April after the budget:
The Treasury hopes the changes will eventually save it more than £4bn a year, and this will come from UK Pensions. Thus, if you have a UK pension , in all likelihood you will be funding some of this. These are some of the proposed changes:
1) Lifetime allowance is changing from £1.8m to £1.5m, thus, taxing an additional £300 000.
2) Any amounts above the Lifetime Allowance will be taxed at 50%, rather than previously at 25%. Thus, the extra £300 000+ will be taxed at double the rate!
3) The test for Lifetime Allowances for Final Salary schemes will change, increasing the lifetime allowance value, thus attracting the additional taxes. Previously a factor of 10 was used, now a factor of 16 is proposed.
4) Annual contribution into UK pension will be reduced from £255 000 to £50 000.
5) Should you die a flat tax rate of 55%. Thus, on death you lose over half.
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