Will I just inherit my dads pension or will I pay inheritance tax?

hoodedclaw79

Hi

My dad has a private pension worth over £700k and I am just wondering if I will just inherit it when he dies and draw an income as he does or will I have to pay inheritance tax on it? Is there a way to add my name to his pension to avoid any inheritnace tax?

Thanks

N

atush

if he hasn't taken it yet, a spouse can inherit it all, but dependants and others inherit it according to his death in service declarations and rules. If it is a PP, I beleive there is a tax charge.

If he takes his pension as an anuity w/o a guarantees, then you inherit nothing.

If he takes his pension as DD, with the 25% tax free lump sum, you will inherit all the 25% (that he hasn't spent) and 55% of the remaining DD pot.

Gracchus_Babeuf

hoodedclaw79 wrote: »

Hi

My dad has a private pension worth over £700k and I am just wondering if I will just inherit it when he dies and draw an income as he does or will I have to pay inheritance tax on it? Is there a way to add my name to his pension to avoid any inheritnace tax?

Thanks

N

Is this a notional 'pot' based on a final salary pension payout or an actual sum lying in an occupational or private pension plan? The hugeness of the sum suggests the former, but it would help if you specified this.

hoodedclaw79

Yes it is a private pension that is tied up in various investments.Im aware it is going to my mum if he passes before her but I am judt wandering if I can have my name added to the pension as a third party to avoid inheritance tax.

dunstonh

Pensions are not subject to inheritance tax. Depending on the type of pension income he has chosen (and the options selected) will depend on the level of death benefits available

atush

hoodedclaw79 wrote: »

Yes it is a private pension that is tied up in various investments.Im aware it is going to my mum if he passes before her but I am judt wandering if I can have my name added to the pension as a third party to avoid inheritance tax.

If his estate would be that large (and he is likely to die before taking a pension) then I would suggest seeing an Inheritance Tax specialist for planning advice.

Gracchus_Babeuf

hoodedclaw79 wrote: »

Yes it is a private pension that is tied up in various investments.Im aware it is going to my mum if he passes before her but I am judt wandering if I can have my name added to the pension as a third party to avoid inheritance tax.

Normally pensions are only passed on to the surviving partner. Not sure if you'll be entitled to anything at all, to be honest. Also, it depends on what you mean by 'various investments' - if some these are outside of the pension plan then it should be possible to pass them on to you at some point.

xylophone

Do you mean that your father has a SIPP and is currently in drawdown?

hoodedclaw79

Hi yes its a SIPP,sorry still getting up to speed with the jargon.

bilbo51

hoodedclaw79 wrote: »

Hi yes its a SIPP,sorry still getting up to speed with the jargon.

And is your Dad receiving his pension now?

hoodedclaw79

Hi yes he is and has been for just over a year.