Lifetime allowance abolition – an update

The abolition of the Lifetime Allowance (LTA) is being undertaken in two stages. The first was the removal of the LTA tax charges from 6 April 2023. The second will be the abolition of LTA itself from 6 April 2024. Rather than a simple abolition, the LTA is in effect being replaced by lump sum allowances which will still control the level of tax-free cash that an individual can receive from registered pension scheme arrangements. On 4 January 2024, HMRC published an updated newsletter providing further guidance on the how this will work in practice.