Pension "death tax" - a game changer for inheritance tax planning?

Eric_the_half_a_bee

George Osborne to cut 55% pension 'death tax'

http://www.bbc.co.uk/news/uk-politics-29402844


A game changer for inheritance tax planning? For example, borrow against the family home and load up the pension?

mystic_trev

I'd already thought this was a 'done deal' when he announced the Pension changes in the last Budget. Am I missing something?

kaya

Don't believe a word any politician says when there is an election looming, and don't forget how they have removed and deleted all the promises they made before they got elected from their website that they broke

westy22

mystic_trev wrote: »

I'd already thought this was a 'done deal' when he announced the Pension changes in the last Budget. Am I missing something?

The Budget indicated that the Government were investigating reducing the tax - today's announcement confirms that the tax will be scrapped entirely. That is very significant.

bilbo51

westy22 wrote: »

The Budget indicated that the Government were investigating reducing the tax - today's announcement confirms that the tax will be scrapped entirely. That is very significant.

Small correction. It confirms nothing. It's electioneering. It means nothing. Remember the LD promises on student loans prior to the last election?

mystic_trev

bilbo51 wrote: »

Small correction. It confirms nothing. It's electioneering. It means nothing. Remember the LD promises on student loans prior to the last election?

It will be popular with their core voter and be in place before the next Election.

greenglide

mystic_trev wrote: »

It will be popular with their core voter and be in place before the next Election.

Even though 75% (or more) of the electorate don't understand what it is that if being promised!

Possibly the the same people who think that "they don't have to but an annuity" since the budget!

mystic_trev

greenglide wrote: »

Even though 75% (or more) of the electorate don't understand what it is that if being promised!

Possibly the the same people who think that "they don't have to but an annuity" since the budget!

The Daily Mail will explain it to them over their Cornflakes.;)

http://www.dailymail.co.uk/news/article-2772953/George-scraps-pensions-tax-Giveaway-means-leave-money-children.html

le_loup

Yes, and I notice they are using a new term "Hard working Savers". Is that the same as hard working families? Do we have a choice to become hard working families or hard working savers? Could we be both? Would that be too hard? Would that be too much work? We need to be told or else I could die trying and end up giving my idle children the fruits of all my hard work early ... with no tax to pay!

coyrls

le_loup wrote: »

Yes, and I notice they are using a new term "Hard working Savers". Is that the same as hard working families? Do we have a choice to become hard working families or hard working savers? Could we be both? Would that be too hard? Would that be too much work? We need to be told or else I could die trying and end up giving my idle children the fruits of all my hard work early ... with no tax to pay!

When they get your money, they'll be magically transformed into the "hard working" category by virtue of their wealth.

Your_Hero

Eric_the_half_a_bee wrote: »

George Osborne to cut 55% pension 'death tax'
http://www.bbc.co.uk/news/uk-politics-29402844

A game changer for inheritance tax planning? For example, borrow against the family home and load up the pension?

Care must be taken.

As I said in another post, your pension pot could be subject to IHT if your pension contributions was radically increased (breaking years of pattern in contributions) and there is evidence to indicate that you had become aware of your ill-health and likely to die within 2 years. This would be seen as an attempt to reduce your taxable estate through your pension rather than to provide for your own retirement and in such circumstances IHT is likely to be apply on your pension (section 3(1) of Inheritance Tax Act 1984).

Any pension passed to your surviving spouse, however, would be IHT-free in any event.