Select committee recommends scrapping of lifetime ISA and pension LTA
Posted: August 17th, 2018, 7:14 am
by ModernMicawber
Re: Select committee recommends scrapping of lifetime ISA and pension LTA
Posted: August 17th, 2018, 8:31 am
by Alaric
From the link
The committee was also critical of the way the government presents the 25% tax charge on its website about the product, as they argued it appears to show investors will lose their 25% bonus if they take money out early when instead they lose 25% of their capital invested.
https://lifetimeisa.campaign.gov.uk/#Withdrawal_ChargeI'm not surprised that it failed to take off if it can tax investment gains at 25%.
Would they scrap it though? It's no doubt some Civil Servant's pet project as with Lifetime Allowance. We've had a change of Chancellor since its introduction.
Re: Select committee recommends scrapping of lifetime ISA and pension LTA
Posted: September 10th, 2018, 10:59 am
by Kipling
Hopefully it survives although I can't see it thriving,
I'll happily concede that its an ill-thought through product (having two radically different objectives), and poorly-sold to the market; but I'm treating it can be a useful addition to a pension portfolio when run alongside a SIPP.
The investment clawback element is punitive, but then I guess that it is meant to be.
I can't begin to guess how any government would disentangle and wind-up the scheme, is anyone aware of any precedents?
Re: Select committee recommends scrapping of lifetime ISA and pension LTA
Posted: September 13th, 2018, 5:23 pm
by gryffron
Kipling wrote:I can't begin to guess how any government would disentangle and wind-up the scheme, is anyone aware of any precedents?
Block new money in, then just convert it into a regular ISA. Which admittedly loses them the clawback option. But as everyone has pointed out, the amounts involved to date aren't that great anyway.
Gryff