Lifetime allowance reduction of tax relief on pension savings will reduce from £1.25 million to £1 million from 6 April 2016 , say pension experts Cullen Wealth.
Legislation for the reduction in the lifetime allowance (LTA) and both the fixed protection (FP2016) and individual protection 2016 will be delivered in the Finance Bill 2016 at the end of this year.
As a result it will not be possible for pension scheme members to apply for any protection until after April 2016.
This means that individuals cannot notify HMRC of their intention to rely on FP2016 in advance.
Individuals who want to rely on FP2016 need to start thinking about what arrangements they need to make to stop accruing benefits after 5 April 2016, there is a danger without pre-planning that many may forget that accruing further benefits or continuing to make contributions post 6 April 2016 will invalidate any application for fixed protection.
This is a complex area of advice; please consult your usual consultant who will be pleased to assist you with the right planning needs.