RPSM04100030 - Technical Pages: Taxation:
Overview: The annual allowance charge and lifetime allowance
charge
The annual allowance charge and lifetime allowance charge
There is no limit on the amount of pension saving an individual
can build up in a
registered pension scheme. There is also no
absolute limit on the amount of benefits that can be provided from
such a scheme.
However, there are two key controls that limit the tax relief
on pension saving. These are
- the
annual allowance - this limits the amount of tax
relief available on pension savings in respect of an individual in
a tax year. Where the increase in tax relieved pension savings
exceeds the annual allowance in relation to a tax year, an
annual allowance charge will arise (see
RPSM06100000).
- the
lifetime allowance - this limits the amount of
benefits that an individual can draw from all registered pension
schemes in their lifetime, and in certain circumstances, the
benefits that can be provided from such schemes on their death,
without triggering the
lifetime allowance charge (see
RPSM11100000).
