HMRC Fixed Protection and Individual Protection 2016 / Applying for Protection

05 January 2016

As we approach the end of this tax year 2015/2016, the LTA limit of £1.25M is falling to £1.0M from the new tax year in April 2016.

As an update to applying for protection, HMRC issued in December 2015 its Newsletter 74, which notes that individuals will be able to apply for Fixed Protection 2016 and Individual Protection 2016 (to £1.25M) from July 2016. To be eligible for this higher level of HMRC Protection, individuals will still be required to have ceased contributions or active membership of any pension before 06 April 2016.

HMRC notes:

What do I need to do to protect my pension savings?

From April 2016 you will be able to apply to HMRC for one of two new protections when the Lifetime Allowance is reduced. These will be known as Fixed Protection 2016 and Individual Protection 2016.

You will be able to apply for these new protections by using a new on-line self-service system which will be available from July 2016. The implementation of the new system has been part of the delay in allowing protection to be applied for. The new self-service system is still being developed and we will provide you with more information on this in due course.

Interim Protection

For those who plan to draw pension benefits between April 2016 and July 2016 and need to rely on Fixed Protection or Individual Protection 2016, an interim temporary application process is planned to be available. A full protection process will still be required by these individuals retiring post July 2016.

The link to the HMRC update is here:

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This is an important update and may help in the pension planning you may wish to consider over the remainder of this tax year. No individual advice is provided during the course of this Blog.

If you would like to review your pension and retirement planning arrangements further then please contact the team at either our Guildford or Woking offices.

Keith Churchouse FPFS
Chartered Financial Planner
CFP Chartered FCSI
ISO22222 Certified

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.