Saver avoids LTA charge after receiving poor advice

The tribunal found Gammell only became aware that he could make a late application in August 2016. 

Given that it takes time to appoint a new adviser, and ignoring the month lost by illness of the staff member of the former adviser, the period of three months between August 2016 and December 2016 when the late application was submitted to HMRC, was in its view “sufficiently diligent and expeditious”.

Therefore the appeal was allowed.

At Budget this year, chancellor Rishi Sunak said the LTA will stay at its current level of £1,073,100 until April 2026, instead of increasing in line with the consumer price index. 

John Hood, a tax partner at Moore Kingston Smith, said: “The frozen pension lifetime allowance will cause more prudent savers to exceed the allowance and suffer 60 per cent tax rates on their pensions.

“Well advised savers can avoid this tax charge by claiming protection for their pension but only if they do so within time limits which HMRC strictly enforce.”

He added: “Mr Gammell missed the relevant time limit and was potentially facing a large liability on his lifetime’s savings. The first-tier tax tribunal has come to his rescue by allowing his claim to be made late as his financial advisor had let him down which was viewed as a reasonable excuse. 

“Crucially, that there was no unreasonable delay on his part once he became aware of the problem.”

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