160k, what to do?

jimjames

luvpump wrote: »

Any idea when ??

Depends on size of company but with 50-249 employees it will be between April 2014 and April 2015 so they haven't got long before they have to comply.

http://www.thepensionsregulator.gov.uk/docs/detailed-guidance-2.pdf

atush

Although the most tax efficient investment would be a pension scheme, this would not release the capital when you die.

Wrong. Capital would be released on your death if pre crystalisation. According to your declaration of wishes.

So, in your case with no pension, I'd open a PP. Does your spouse have one? If not, for them too. Then add some next tax year as well. Join your work scheme as soon as it opens before april 2015.

Then 2x S&S isas for this year and next.

Then boost your cash savings and attend to any repairs/replacements in your main asset- your home. Replace any cars that are 8-10 years of age?

Boost your children's trust funds if in equities, otherwise a children's regular saver from the halifax for each.

Then a modest family holiday, where you can indulge in some fun and do toast your relative who made it all happen. We did this on a sunset sail with a bottle of champagne.

kidmugsy

atush wrote: »

Then boost your cash savings and attend to any repairs/replacements in your main asset- your home. Replace any cars that are 8-10 years of age?

The only time we've changed a youthful car like that was when some sod stole it.

Nick_C

atush wrote: »

Wrong. Capital would be released on your death if pre crystalisation. According to your declaration of wishes.

Thanks, You're right. But isn't it the case that it would be subject to 55% tax, if the OP lives beyond 75 or uses income drawdown? (Although under current legislation it would not be subject to death duties.) So most of the remaining capital would be lost?

jasonparker

Thanks for the advise everyone, plenty to think about now!

kidmugsy

jasonparker wrote: »

Thanks for the advise everyone, plenty to think about now!

One thing we forgot. When you go to see your solicitor ask him about setting up a trust by using a deed of variation of the will (you have two years in which to act, from the death). That might in the long term save your boys, or their children, from an Inheritance Tax bill on your death.

atush

kidmugsy wrote: »

The only time we've changed a youthful car like that was when some sod stole it.

Good one kidmugsy. My car is 10 this year and the OH's is 14 lol. But not everyone out there is as tight as we are.

atush

Nick_C wrote: »

Thanks, You're right. But isn't it the case that it would be subject to 55% tax, if the OP lives beyond 75 or uses income drawdown? (Although under current legislation it would not be subject to death duties.) So most of the remaining capital would be lost?

No tax as is outside the estate.

Once a pension is crystallised, it is a different matter and if in DD 100% can be inherited by a spouse if kept as a pension, and 55% tax charge to pay out a LS.

bigadaj

atush wrote: »

No tax as is outside the estate.

Once a pension is crystallised, it is a different matter and if in DD 100% can be inherited by a spouse if kept as a pension, and 55% tax charge to pay out a LS.

I think the tax charge would be made on an uncrystallised pension should they die over teh age of 75. I thought this had been removed when the need to crystallise at 75 was removed but hmrc website seems to indicate that this charge still exists.

Nick_C

As OP has said he has no pension to speak of, it is likely that if he puts this money into a pension scheme, he will start drawing on it before he dies, and so the capital would, on death, be taxed at 55%. This, plus the tax due on any pension income, may well negate the tax advantages gained when funding.

He also states is single, although this of course might change in the future, but currently no spouse to leave a pension to.

Add to that that if he invests the cash outside a pension scheme, he can draw on should he need to, so he keeps his options open.