RPSM11300055 – Administrator Pages: The Lifetime allowance: How the lifetime allowance charge is operated

How should the lifetime allowance charge be reported?

The lifetime allowance charge should be reported on the Accounting for Tax (AFT) form – APSS 302. The tax itself is due at the same time that the form is due to be submitted to HMRC ie 45 days after the quarter of the year in which the benefits are paid or entitlement arises. So 45 days after 31 March, 30 June, 30 September and 31 December.

The tax is due without the need for HMRC to issue an assessment to tax.

Interest will be due where tax is not paid within the due date ie 45 days after the end of the quarter year concerned.

Scheme provisions and the power to levy a lifetime allowance charge

[Regulation 8 Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006 SI 2006/364]

The scheme rules of a registered pension scheme are regarded as modified to enable a scheme administrator to provide for the recovery from benefits or entitlement to benefits for which the lifetime allowance charge arises.

This power extends only to the extent that benefits are being reduced in accordance with what would be regarded as normal actuarial practice.