SSAS Death Benefit

jeffded

hello - hopefully someone can clarify this for me

I was in a ssas with my father relating to a business we owned together - we were the only two contributors but my mother was a member as well.
My father died at 66 and his assets passed to my mother who has been able to take some income tax free as a result (the assets amounted to around 400k)
my mother is approaching 75 and the question I have is whether the tax free status of the assets transferred to her remains after 75 or whether they will just form part of her normal pot once she reaches 75?

many thanks in advance

xylophone

https://www.barnett-waddingham.co.uk/comment-insight/blog/death-and-ssass/#:~:text=If you die before reaching,paid free of income tax.

Age 75  is relevant to the age at death of the deceased not  the beneficiary?

jeffded

xylophone said:

Age 75  is relevant to the age at death of the deceased not  the beneficiary?

Thanks for the reply.

This is true - the cash was left within the ssas so I am wondering if it's best to withdraw now to take tax free or whether we leave it in and it remains tax free upon her death

Marcon

jeffded said:

xylophone said:

Age 75  is relevant to the age at death of the deceased not  the beneficiary?

Thanks for the reply.

This is true - the cash was left within the ssas so I am wondering if it's best to withdraw now to take tax free or whether we leave it in and it remains tax free upon her death

What is 'best' depends largely on (a) what she'd do with the cash (i.e. does she have a need for it to pay off debts or loans, or something she is made keen(!) to invest in) and (b) the likely overall value of her estate when she dies.

Linton

The tax free inherited pension assets remain tax free after the beneficiary reaches 75.

As to what action is best, one must ask best for who? As far as mother is concerned it would seem best that the income from the assets remains tax free for the rest of her life.  Taking no action also implies minimum hassle.

Whether that is best for you may be a different matter and is certainly arguable since once the pension is cashed it becomes part of mother’s estate for inheritance tax.  However it is her money so I would suggest her needs and wishes should take priority.

jeffded

Linton said:

The tax free inherited pension assets remain tax free after the beneficiary reaches 75.

If this is the case then this makes a big difference

At all stages her assets have been managed entriely in her interests. This issue arose as she owns a villa in Portugal which has significantly risen in value and will create an IHT headache.

It also costs alot to run. My plan was always to keep this going and then pay any iht with her ssas cash. 


My father was adamant he wanted to keep this so the extended family can use it so I'm just trying to balance everyone's wishes, but these things aren't always possible. 

It doesn't make any difference to me either way, maybe marginally better to keep within the SSAS as it gives me more options there.
She's incapable of spending what she has and has more than adequate resource for day to day living and a contingency plan.

Thanks for the information - will help me cogitate over the weekend