HMRC has made several minor technical amendments to ensure that the legislation on the abolition of the lifetime allowance continues to function as effectively as intended, with a consultation on the legislation to be held later this year.

HMRC's latest Pension Schemes Newsletter, which also provided further clarification on tax-free lump sums and cancellation rights, confirmed that the regulations will be made in early 2026 and, when introduced, will have retrospective effect from 6 April 2024.

According to HMRC, these changes are designed to clarify certain provisions, correct minor drafting inconsistencies and support smoother implementation.

Given this, it said that, whilst important, they will not affect the vast majority of pension savers.

In particular, the key amendments will ensure lump sums paid from an overseas pension scheme to a UK resident continue to be treated similarly to such payments, and that the valuation of a member’s relevant crystallised pension rights for trivial commutation lump sums is consistent with the rules in place prior to April 2024.

The changes are also intended to ensure that the calculation for individuals with scheme-specific pension commencement lump sum operates as intended, and that provisions are put in place for stand-alone lump sum values to be transferred to a receiving scheme.

HMRC said that there may be further minor changes following consultation with industry, which will take place later this year.

Further instructions on how to provide feedback on the draft regulations is to be shared in due course.

---