Inheritance Tax Planning

whiteflag_3

fagun wrote:

HMRC keep on changing the rules retrospectively, so anything is possible.
However - A Day is about simplifying Pension rules (see http://www.fsa.gov.uk/consumer/06_PENSIONS/index.html) - the types of things that chnage relate to limits, having to buy annuities, etc.

The basic principles around pension structures should not change. Pensions have a tax wrapper and managed by trustees. If you die before you start using your pension, then this amount should not be part of your estate - but you need to look at the rules for your pensions scheme (some schemes return the money if you die within the first two years). The trustees will pay.

If you die after you start drawing down, then the annuities etc rules apply. A-Day may make a difference here. I've never investigated as I'm miles away from retirement day.

The big problem with using pensions as an IHT scheme is that you're locking your money away until retirement age. Unless you're close to that age, your intended beneficiaries won't be able to touch it for a long time. So tax efficient but not always practical.

A day does make a difference. Fagun while you seem have a good basic level of pension knowledge , the rules post a day are still very complex and as dunstonh says, still to be rolled out. I think it is dangerous to post your views as fact re iht and pensions

Veggiefan

I found this guide called Inheritance Tax in Plain Man's English. It really helped me to understand things much more, and they let you know what you should expect to pay to get some of the more complicated things done by the experts.

It's a 24 hour number: 0800 011 2141

When I understand it better I'll post some suggestions to some of the main issues.

fagun

whiteflag wrote:

A day does make a difference. Fagun while you seem have a good basic level of pension knowledge , the rules post a day are still very complex and as dunstonh says, still to be rolled out. I think it is dangerous to post your views as fact re iht and pensions

If you'll read the post, the first line says "HMRC keep on changing the rules retrospectively, so anything is possible."
I was talking about the principle behind pensions. The idea of A-Day is to simplify rules - that's not to say it won't get complicated (anything politicians & HMRC touch does).
More importantly, I was making the point that you shouldn't necessarily use Pensions as an easy IHT saver - you're restricting when you can touch the cash.

sneekymum

whiteflag wrote:

A day does make a difference. Fagun while you seem have a good basic level of pension knowledge , the rules post a day are still very complex and as dunstonh says, still to be rolled out. I think it is dangerous to post your views as fact re iht and pensions

I value Fagun's contribution to this board.

This is a discussion board and those reading it should know better then to rely on anything written here. I've read some rubbish posted by supposed experts but no one should be shot down for trying to help. It would be a shame to turn this into Questions and Answers time - what professional adviser is going to add this to their liability? - there are many ordinary people here with valid experience to share.

whiteflag_3

sneekymum wrote:

I value Fagun's contribution to this board.

This is a discussion board and those reading it should know better then to rely on anything written here. I've read some rubbish posted by supposed experts but no one should be shot down for trying to help. It would be a shame to turn this into Questions and Answers time - what professional adviser is going to add this to their liability? - there are many ordinary people here with valid experience to share.

Here here. Its a shame when you try to help by pointing people in the right direction that you end up getting grief. The idea of the gentle warning was in the hope Fagan might come back with other questions that would lead to other discussions. Never mind Ill leave you to get on with it .

ps fagan the IHT limit is £275k

fagun

whiteflag wrote:

The idea of the gentle warning was in the hope Fagan might come back with other questions that would lead to other discussions. Never mind Ill leave you to get on with it .

ps fagan the IHT limit is £275k

Thanks for the correction on IHT limit - last time I looked at the limit must have been last tax year. I must admit I read your first post as being a bit of a put-down, but I understand now that u didn't mean it that way.

Going back to my original question, I've tried to write my/ OH's wills so that we don't have to update annually for changes in the IHT limits. Does anyone kinow if you can gift assets by refenrece to the Nil Rate Band, or do you have to given an explicit amount?
Also, I know that kids can't hold property, but I assume that a guardian can hold it on their behalf, so "assets" could include a share of the house???
I don't want to create a discretionary trust as it makes income tax and CGT more complicated.

sabelu

Anyone know where I can find more about this ?

dunstonh

sabelu wrote:

Anyone know where I can find more about this ?

You mean whole of life assurance?

Any IFA or just look up whole of life assurance on google.

oceanblue_3

fagun wrote:

Thanks for the correction on IHT limit - last time I looked at the limit must have been last tax year. I must admit I read your first post as being a bit of a put-down, but I understand now that u didn't mean it that way.

I think you'll find that all the qualified advisers here are genuine; putting-down any poster (with one notable exception) would be counter-productive.

fagun wrote:

Going back to my original question, I've tried to write my/ OH's wills so that we don't have to update annually for changes in the IHT limits. Does anyone kinow if you can gift assets by refenrece to the Nil Rate Band, or do you have to given an explicit amount?

No, you can use this form of words: "the then Nil Rate Band". This will do the trick.

fagun wrote:

Also, I know that kids can't hold property, but I assume that a guardian can hold it on their behalf, so "assets" could include a share of the house??? I don't want to create a discretionary trust as it makes income tax and CGT more complicated.

Possibly, but it would also be very effective. It would be virtually impossible for a house to be held for the benefit of minors in anything other than a trust.
Let's assume you and your wife/partner had died, and willed the family home to your children. Would you expect their guardians to reside with them at the family home? If not, why would you want to will it to them "in specie"?

If you really wanted them to continue living there, and their guardians were in agreement, there would be no income tax nor CGT on the way into the trust (and, probably, no IHT if you had embarked upon some estate planning via Nil Rate Band Discretionary trusts). There would be no significant tax considerations while your children lived in the "family home"; there is the possibility of a periodic charge being levied, but this would be miniscule. On disposal, the home would be treated as if it had been your children's pincipal private residence, so no CGT.

sabelu

Is'nt there an insurance that protects against inheritance tax ?