Glossary · UK
What is LSDBA (Lump Sum and Death Benefit Allowance)?
Cap on tax-free pension lump sums paid in life and on death — £1,073,100 from April 2024.
Full Definition
The Lifetime Allowance was abolished from 6 April 2024 and replaced by two new caps. The Lump Sum Allowance (LSA) limits tax-free cash you can take from pensions in your lifetime to £268,275 (25% of the old LTA). The Lump Sum and Death Benefit Allowance (LSDBA) caps the total of tax-free lump sums paid in life plus tax-free lump-sum death benefits at £1,073,100. Amounts above each cap are taxed as pension income at the recipient's marginal rate. Anyone with valid LTA protection keeps higher personal limits. The change benefits savers building larger pots but tightens rules on death benefits paid as lump sums.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.