However, there was a surprise announcement in the spring Budget that the LTA charge will be reduced to 0 per cent for the 2023-24 tax year before the LTA itself is abolished the following year from April 2024.
Draft legislation is expected shortly, but the removal of the LTA charge means it looks like there will be no upper limit for pension death benefits, at least for the time being.
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Beneficiaries will only have the potential income tax implications to contend with, as well as the prospect of unlimited IHT protection if designated to provide a pension.
Joshua Croft is a senior technical consultant at AJ Bell
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