Abolishing the lifetime allowance
An update from HMRC
The lifetime allowance was abolished on 6 April 2024. However as you may be aware, there have been some challenges faced by platforms, advisers and clients in navigating the new rules due to delays receiving guidance from HMRC.
On 4 April 2024, HMRC released a newsletter in which it advises some clients to delay taking benefits, or transferring their pension until it can remedy incorrect legislation.
HMRC advise that certain groups of people should delay action until regulations are passed through Parliament to correct the legislation. Those affected by HMRC’s advice relate to any cash which involves:
- scheme specific tax-free cash protection
- a transfer with enhanced protection
- enhanced protection and primary protection cases with protected lump sum rights of more than £375,000
- the payment of a lump sum death benefit from funds which crystallised before 6 April 2024
- any transfer from drawdown to a QROPS
- any transfer to a QROPS which involves pre-April 2006 benefits
In respect of the above cases, HMRC state that ‘schemes should advise members to request a delay to the payment/defer their request to transfer’. Therefore, if you believe that you fall into one of the scenarios above, please contact your financial adviser. If you do not have a financial adviser, please contact us directly at 0370 414 7000. Please select option 8 when calling.
We strongly recommend that you speak with a regulated financial adviser to understand more about how these regulatory changes may impact you and your pension.

Overseas transfer allowance (OTA)
The OTA is a limit on transfers to a qualifying recognised overseas pension scheme (ROPS). The OTA for the 2024/2025 tax year is £1,073,100. If you exceed this allowance, you will be subject to an overseas transfer charge of 25%.
Some transfers to a ROPS may already be subject to a 25% overseas transfer charge. The current overseas transfer exclusion requirements are:
- Member and receiving scheme in the same country
- Receiving scheme in European Economic Area (EEA) state or Gibraltar & member resident in United Kingdom (UK) or EEA
- Receiving scheme is an occupational scheme
- Receiving scheme set up by an international organisation
- Receiving scheme is an overseas public service scheme
Where an overseas transfer does not meet the exclusion requirements above, the entire transfer value will be subject to an overseas transfer charge of 25% and will not reduce the OTA.
Transitional agreements
A Transitional Tax-Free Amount certificate (TTFAC) is provided by a registered pension scheme, following receipt of complete evidence, to show an individual’s lump sum transitional tax-free amount and lump sum and death benefit transitional tax-free amount.
An individual, or a personal representative, can apply for a TTFAC from a registered pension scheme where the individual is a member or, if the individual is deceased, of which the individual was a member immediately before death.
In order to obtain a TTFAC, the applicant will need to provide complete evidence of any lump sums or lump sum and death benefits in respect of any pension the client has been a member of. The scheme administrator will use this evidence to determine the client’s transitional lump sum tax-free amount and transitional lump sum and death benefit tax-free amount and issue a certificate, or decline the application.
To obtain a TTFAC, please contact us.
If you have utilised 100% or more of your Lifetime Allowance then you will have no Lump Sum Allowance or Lump Sum and Death Benefit Allowance remaining.
The type of protection that you hold determines what new rules are in place and how the Lump Sum Allowance (LSA) and Lump Sum and Death Benefit Allowance (LSDBA) are impacted.
The restriction on clients being unable to take a UFPLS due to holding an enhancement factor has been removed and they will be able to take UFPLS payments from 6 April 2024.
For the following protection types, the standard LSDBA of £1,073,100 is replaced by their personal LSDBA and the standard Lump Sum Allowance is 25% of this.
Protection Held | LSDBA | LSA |
Fixed Protection 2012 | £1,800,000 | £450,000 |
Fixed Protection 2014 | £1,500,000 | £375,000 |
Individual Protection 2014 | Personalised LTA amount | 25% of personalised LTA amount |
Fixed Protection 2016 | £1,250,000 | £312,500 |
Individual Protection 2014 | Personalised LTA amount | 25% of personalised LTA amount |
For those clients with protection types not outlined above, there are more complex rules in place. Please contact your financial adviser to learn more.