I am dealing with a Lifetime Allowance assessment arising following the death of a high-earning individual who died in service. The assessable amounts comprise a number of elements including a serious illness commutation, a death in service benefit, a pension payable to widow and pensions payable to children whilst in full-time education. I understand that the capitalised value of a pension for the purposes of LTA is to multiply the value of the annual pension at inception by 20. (Feel free to correct me on that if I am wrong!) Please can anyone tell me how do HMRC produce a capital value for LTA purposes for a pension payable to a child, the pension ceasing once the child leaves full-time education? I anticipate that the factor of 20 will not apply.
9th Sep 2020
Lifetime Allowance - Capitalised value of pension
Re. LTA - Formula for capital value of pension payable to a child whilst in full-time education
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