Hi
If I used up 100% of my lifetime allowance now, but save a proportion of my SIPP untouched with the aim of passing the SIPP on to my children in say 25 years time (I am assuming I am that lucky!) - how would the lifetime allowance test be applied.
Assuming that the lifetime allowance has doubled in that time (cpi ~2.8% for 25yrs)
Will the test be applied as a percentage - I've used 100% now and therefore I've still used 100% in 25years time therefore there is no extra head room? (Therefore my SIPP will be taxed in full - 55% for lump sum)
or
Will the test be applied as an amount - I've used £1M now - in 25 years AA will be £2M - therefore I have £1M extra allowance - so my SIPP can be passed on without Annual Allowance tax charge as long as its value is less than £1M?
(I understand that if I am over 75 at dod then the SIPP would be additionally taxed as income tax)
Thank you for taking time to read
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