Pensions and Tax - Q & A
Tax questions & answers for pensioners.
I am already drawing my Principal Civil Service Pension Scheme (Northern Ireland) [PCSPS(NI)] benefits. Do I need to worry about the Lifetime Allowance?
If all of your pension saving is already in payment, and you have no intention of starting a new pension, you do not need to worry about the Lifetime Allowance. If you have any other pension savings which were not in payment at April 2006 and if the combined valuation of your pension(s) in payment plus your pension saving is more than £1.5 million then you should consider registering with the Inland revenue (now part of HM Revenue and Customs (HMRC)) for transitional protection.
Will the Lifetime Allowance mean that my wife might get an extra tax bill when I die?
Pensions paid to widow(er)s and other dependants of scheme members will not be tested against the Lifetime Allowance. If, at April 2006, you will still be within your pension protection period you should consider electing to have any lump sum paid on your death after retirement paid instead as a ‘pension protection’ lump sum so that if over the LTA it is taxed at a lower rate. For more information read booklet 'Your pension and tax: How the rules may affect you' which you will find in the resources section.
I left with an early retirement package and am receiving an ‘Annual Compensation Payment (ACP)’. Am I treated the same as other pensioners?
People who are receiving ACPs have their pension preserved for payment at age 60. Unless you have chosen to draw your pension early on an actuarially-reduced basis, you are not yet a Civil Service pensioner and you should use your preserved pension to calculate your Lifetime Allowance.
How do I find out more?
- See the HM Revenue and Customs’ Newsletter No 1 available on their website.
- For help in tracing ‘lost’ pensions try the Pension Tracing Service.
- More information about the pensions and tax changes see the HMRC Website.
For further details on LTA and AA and how to calculate them you can read information booklet:
All booklets and leaflets can be found in the resources section.
If you would like more information please contact the Member Administration Section.
You can find their number in the contact us section.