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AFPS (Lifetime Allowance).

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AFPS (Lifetime Allowance).

Old 7th Jun 2021, 10:05
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AFPS (Lifetime Allowance).

https://www.ft.com/content/5460e955-...3-94b55d5bdf33



Al R is offline  
Old 7th Jun 2021, 18:29
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It is one of the reasons that I BCE’d 10 years ago when the LTA was £1.8M. Now I’ve rejoined and earning a new pension, then I would need to earn a massive new pension to breach it. Sadly, you can’t do that retrospectively, so those looking at McCloud Judgements will also need to carefully consider this.2007/08 £1.60m

2008/09 £1.65m

2009/10 £1.75m

2010/11 £1.80m

2011/12 £1.80m

2012/13 & 2013/14 £1.50m

2014/15 & 2015/16 £1.25m

2016/17 & 2017/18 £1.00m

2018/2019 £1.03m

2019/2020 £1.055m

2020/2021 £1.0731m

2021/2021 £1.0731m

It’s now FROZEN until 1 Apr 26, which means that the £1.0731m will slowly depreciate in real-term value. Sadly there isn’t much you can do about it retrospectively. However, those that were made redundant in the 2010 SDR redundancy rounds, that rejoined again later, should be able to take advantage of this if they received an IPP under AFPS75. Every cloud...
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Old 8th Jun 2021, 07:02
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Iím still waiting for the tactical divorces.
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Old 8th Jun 2021, 07:11
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Originally Posted by Al R View Post
Iím still waiting for the tactical divorces.
The thought had crossed my mind. Pension sharing would be effective in reducing AA liability also. Would HMRC have legal redress if the divorcees cohabited, perhaps after a separation of roughly the same length as a standard RAF deployment?
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Old 8th Jun 2021, 07:28
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I’m still waiting for the tactical divorces.
Won't happen. It's the sort of thing that folk bar chat about, but in the real world nae chance. Maybe the occasional screwball with seriously maladjusted priorities, but stunts like this usually blow up big style with all sorts of unintended consequences.

Back in the day (well back ) we all used to spout about getting out cheaply by marching into the bosses office and outing oneself. Just bar spraff...never happened once*...except of course where it was true.

*to my knowledge...I'm sure some ppruner will be along shortly with a "true" story of just the opposite. Don't bother, I'm simply making the point that in the real world, this sort of thing is 99% talk, 1% action.
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Old 8th Jun 2021, 07:53
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I was thinking lightheartedly, and a little more in the abstract.

However, I do think that with the passing of time, as the concept of marriage becomes less important to many more of us, that there probably will be some very wealthy middle-aged couples who have no children and possibly no other disapproving family ties, who look upon divorce as a valid way of saving potentially, many hundreds of thousands of pounds. There is nothing to stop them then living together, and enjoying the same quality-of-life as before, but without the social constraints or benefits.

Do I think itís likely to happen? No not particularly, although as you say there will be a minority who do decide to do it. More likely I think, it could appeal more to those couples who are probably already on the cusp of deciding to divorce anyway (possibly as a result of having to spend more time together during this Covid melodrama) and will look upon this potential financial saving as being a very valid reason, possibly the one that tips them over the edge, to do so.
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Old 12th Jun 2021, 22:24
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Originally Posted by Al R View Post
I was thinking lightheartedly, and a little more in the abstract.

However, I do think that with the passing of time, as the concept of marriage becomes less important to many more of us, that there probably will be some very wealthy middle-aged couples who have no children and possibly no other disapproving family ties, who look upon divorce as a valid way of saving potentially, many hundreds of thousands of pounds. There is nothing to stop them then living together, and enjoying the same quality-of-life as before, but without the social constraints or benefits.

Do I think itís likely to happen? No not particularly, although as you say there will be a minority who do decide to do it. More likely I think, it could appeal more to those couples who are probably already on the cusp of deciding to divorce anyway (possibly as a result of having to spend more time together during this Covid melodrama) and will look upon this potential financial saving as being a very valid reason, possibly the one that tips them over the edge, to do so.
As a PA flt Lt I had hoped I wouldnít have to worry about this, but say I took out a SIPP and it did rather well, how would I find out the value of my AFPS pot? I want to utilise the tax benefits of contributing to a SIPP but I donít want it to end up costing me more than it benefits...
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Old 13th Jun 2021, 22:11
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Originally Posted by FJ2ME View Post
how would I find out the value of my AFPS pot?
You can request one pension statement per year from Veterans UK at no charge, additional statements are chargeable. Or you can work it out yourself by using the online AFPS pension calculator and crunching the resulting numbers through the calculations detailed in this guide.
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Old 14th Jun 2021, 07:38
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Originally Posted by FJ2ME View Post
As a PA flt Lt I had hoped I wouldnít have to worry about this, but say I took out a SIPP and it did rather well, how would I find out the value of my AFPS pot? I want to utilise the tax benefits of contributing to a SIPP but I donít want it to end up costing me more than it benefits...
Your annual statement should give you the percentage attained towards your lifetime allowance. Are you married? If so, consider the merits and pros and cons of contributing into a pension in your wife or partnerís name. Or consider the ISA wrapper instead.
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Old 14th Jun 2021, 12:07
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[QUOTE=Al R;11061723]Your annual statement should give you the percentage attained towards your lifetime allowance. Are you married? If so, consider the merits and pros and cons of contributing into a pension in your wife or partnerís name. Or consider the ISA wrapper instead.[/QUOTEI agree with Al. If you have a spouse and they are a lower rate tax payer then you probably need to write to Glasgow to get your PIA report.
PAS Flt Lt is definitely higher rate territory, so you may find that you are close to the AA, but not definitely. It could make financial sense to get your 40% tax rebate up to the limit, then invest in your spouseís.
you may need a good tax accountant to ensure you donít breach your AA, and from experience the FPS steer you to a professional. If you do breach this yearís AA your PIA statement will tell you if you have part of last yearís allowance to use.
Itís a complex area, but totally doable, maybe even without an accountant. The money is there for claiming, and SIPPs are great fun!
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Old 15th Jun 2021, 07:21
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As an ex-PA Flt Lt who left age 53 and is still working/flying and in receipt of my mil pension (75%) I used a financial advisor to assess my position.

I now pay into a pension for my wife - very tax efficient but haven't taken the option of increasing my contributions to my current work pension as that would take me very close to the LTA.
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Old 15th Jun 2021, 17:24
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Originally Posted by [email protected] View Post
As an ex-PA Flt Lt who left age 53 and is still working/flying and in receipt of my mil pension (75%) I used a financial advisor to assess my position.

I now pay into a pension for my wife - very tax efficient but haven't taken the option of increasing my contributions to my current work pension as that would take me very close to the LTA.
Most Ďservice wivesí have very little independent pension provision. Starting a pension for them might Ďonlyí produce 20% tax relief uplift (compared to 40% for a PAS flier) but hardly any will pay tax on relevant income, and they will be less likely to suffer via regulatory shift. Similarly, consider the venerable ISA.
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Old 18th Jun 2021, 08:48
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Originally Posted by Al R View Post
Most ‘service wives’ have very little independent pension provision. Starting a pension for them might ‘only’ produce 20% tax relief uplift (compared to 40% for a PAS flier) but hardly any will pay tax on relevant income, and they will be less likely to suffer via regulatory shift. Similarly, consider the venerable ISA.
On a related issue, spouses who have accompanied their serving partner abroad and have been unable to work, they can recover Class II NI payments through HMRC, as if they had been working during these times. It's a simple process and my (ex) partner has recovered 10 years of lost Class II contributions. Search for it on the HMRC website.
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Old 18th Jun 2021, 11:33
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whenurhappy, Good tip, but I'm struggling to find a relevant link. Living overseas, I have difficulty logging on to HMRC. Can you provide a link? TIA
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