More budget speculation

Thrugelmir

michaels said:

Thrugelmir said:

Albermarle said:

Flugelhorn said:

ugh and there was me thinking my untouchable pension pot could pay the IHT 

However when the IFS guy attacked pension tax breaks as "indefensibly generous" and "very, very beneficiant", you can maybe feel change is in the air.

Looking at the bigger macro picture. There's a huge void to be filled. No stone is going to be left unturned. People with capital have become wealthier and wealthier by doing little of a productive nature. Time for some of the free lunches received to be returned. 

I think you'll find that is how capitalism works, people with savings lend them to entrepreneurs who invest them to produce returns, a share of which goes to the savers.

Majority of retail investors have minimal exposure to start up's. Risk of failure is simply too great. Instead they trade on secondary markets with other investors. All are looking to maximise their personal gains at the expense of others. 

bostonerimus

I find it strange that UK DC pension pots are not counted as part of your estate for inheritance tax purposes.

Flugelhorn

bostonerimus said:

I find it strange that UK DC pension pots are not counted as part of your estate for inheritance tax purposes.

would be tricky - I have a private pension pot  that I'm not touching as have already exceeded LTA - that has a specific value, but how would you value a DB pension ? If you came up with a value how would the IHT be paid as there is actually no cash to pay it?

zagfles

Flugelhorn said:

bostonerimus said:

I find it strange that UK DC pension pots are not counted as part of your estate for inheritance tax purposes.

would be tricky - I have a private pension pot  that I'm not touching as have already exceeded LTA - that has a specific value, but how would you value a DB pension ? If you came up with a value how would the IHT be paid as there is actually no cash to pay it?

There is no way there'll be IHT on DB pensions, DB pensions can't be passed on like DC. There are usually spouse benefits at eg 50% but no IHT between spouses anyway, and children's pension but which are time limited eg till 18 or end of full time education, but they're usually paid to the spouse anyway.

westv

I assume there was nothing in the budget re pensions.

Thrugelmir

westv said:

I assume there was nothing in the budget re pensions.

As expected no there wasn't.  High inflation will do the heavy lifting for the Exchequer for the time being. 

coastline

westv said:

I assume there was nothing in the budget re pensions.

Hardly a mention on income tax , pensions , CGT and IHT. Maybe later when they near the end of their term ?

Budget 2021: CGT, IHT and pension tax relief escape again - FTAdviser.com

budget 2021 - Twitter Search / Twitter

Office for Budget Responsibility (@OBR_UK) / Twitter

Thrugelmir

coastline said:

westv said:

I assume there was nothing in the budget re pensions.

Hardly a mention on income tax , pensions , CGT and IHT. Maybe later when they near the end of their term ?

Plenty of previously announced measures that are going to have an impact indirectly on peoples wealth in the medium term. 

5 year freezing of personal tax allowances is going to generate sizable tax revenues if wage inflation remains high. 

MX5huggy

At least my internal flight to COP26 will be cheaper 🤦‍♂️

Triumph13

Rather than remove the IHT break on DC pensions, it would be much simpler to just treat deaths at <75 the same as those at >75, with the obvious exception that you would still have an LTA test at the earlier of death / age 75.  That way the funds are always taxable income on withdrawal no matter who does the withdrawing.  We don't make DB survivors' pensions tax exempt no matter what the age at death.