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What is the LTA (Lifetime Allowance)?

April 26, 2017allowance lifetime lta

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What is the LTA (Lifetime Allowance)?

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A. The Finance Act 2004 introduced a single tax regime that applies to all UK tax-privileged pensions. This new regime introduced a Lifetime Allowance (LTA), which is the total allowable value of all privileged pensions from all sources. If the value of your total pensions, within the current limits, exceeds the LTA, you will have to pay additional tax, called a recovery charge, of 25% on the excess.