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

kidmugsy

kaya wrote: »

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

What do you have in mind?

kidmugsy

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?

The LD promises presumably concerned what an LD government would have done. They didn't form a government but instead joined a coalition. Coalitions necessarily involve give-and-take. So I suspect you're talking rubbish. But by all means do show me where they said that even if they formed a coalition then ......

s20544

If we assume that this were to go ahead as reported in the media does this mean that a current pensioner could pay lump sum/s into a new pension gaining additional top-ups via the usual tax break at their marginal rate. The pensioner could take dividends/interest as pension income and if their grandchildren were specified as the beneficiaries of any surplus on death of the pensioner then the grandchildren could inherit at their own marginal rate of income tax (potentially tax free if they were not earning).


I assume that I have got this wrong as it would seem overly generous?

Thrugelmir

s20544 wrote: »

If we assume that this were to go ahead as reported in the media does this mean that a current pensioner could pay lump sum/s into a new pension

Would require earned income to do so.

Your_Hero

s20544 wrote: »

If we assume that this were to go ahead as reported in the media does this mean that a current pensioner could pay lump sum/s into a new pension gaining additional top-ups via the usual tax break at their marginal rate.

A "current pensioner" would likely have their annual allowance reduced to £10,000 if they have drawn their personal pensions and probably £3,600 as their actual allowance since pension income does not count.

The pensioner could take dividends/interest as pension income and if their grandchildren were specified as the beneficiaries of any surplus on death of the pensioner then the grandchildren could inherit at their own marginal rate of income tax (potentially tax free if they were not earning)

I assume that I have got this wrong as it would seem overly generous?

See my post #11. We also do not know the exact changes proposed. Some reports I've seen suggest it is only uncrystallised funds which won't have the 55% tax charge applied (i.e. for age 75+). While others suggest it is the complete 55% tax charge to crystallised and uncrystallised funds being abolished. Best not to hold your breath on this one.