HMRC's online system for applications to protect the lifetime allowance is now up and running. Anyone who made a temporary application in April - July now has to make a full online application.
From 2016/17 the lifetime allowance for pensions reduces to £1m. However, individuals can choose to protect their lifetime allowance at a higher amount using Fixed Protection (FP2016) or Individual Protection (IP2016).
Application for either type of protection could only be made after 5 April 2016, and must be made before any benefits are taken from the fund. Individuals wanting to apply for FP2016 must not make any contributions after 5 April 2016.
These applications need to be made using HMRC's online service, which is now finally up and running.
Where individuals wished to take benefits between April and July they should have made a temporary application for IP2016 or FP2016. They will now need to replace this with a full online application to get a permanent reference number.
Links
Our subscriber guide: Pensions: tax rules and planning
HMRC's guidance note Pension schemes: protect your lifetime allowance contains links to the online system for FP2016 and IP2016 applications.
