Chatter about IHT changes/abolishment

Ciprico

...could impact people who have over stuffed their sipps as an IHT avoidance vehicle. Won't impact the beneficiaries but the money could be stuck in a Sipp rather than be given away during the holders lifetime...assuming the pension would attract 40% tax....

artyboy

ISAs are not an IHT avoidance vehicle - I assume you meant to say Pensions?

And if this relates to a rumour that was going around a couple of months ago, it shows how desperate the Tories are, retrenching to their blue rinse base. Not that I'd be unhappy if it happened, but there's the small matter of them having to win the next election before they will implement any manifesto commitments...

mebu60

Ciprico said:

...could impact people who have over stuffed their ISAs as an IHT avoidance vehicle. Won't impact the beneficiaries but the money could be stuck in a Sipp rather than be given away during the holders lifetime...assuming the pension would attract 40% tax....

ISAs form part of your estate for IHT purposes so unsure what 'chatter' you are referring to. Would not seem to be particularly well-informed chatter!

Albermarle

On the other hand if a Labour government were to listen to the IFS, the situation may well head in the opposite direction, as they consider death benefits of pensions to be extremely over generous. Especially since abolishing LTA, the ability to use pensions to shelter from IHT has been increased for the wealthier sections of society.

MeteredOut

I like the bit where you didn't tell us what the thread is about.

wmb194

I presume this is to do with someone's suggestion of taking away the ability to inherit a pension tax-free.

MeteredOut

wmb194 said:

I presume this is to do with someone's suggestion of taking away the ability to inherit a pension tax-free.

Yes, hence the post being about chatter impacting ISAs

mebu60

MeteredOut said:

wmb194 said:

I presume this is to do with someone's suggestion of taking away the ability to inherit a pension tax-free.

Yes, hence the post being about chatter impacting ISAs

Could you illuminate those of us who are not aware of said chatter why the inability to inherit a pension tax-free would impact ISAs? 

masonic

I thought the standard ISA IHT avoidance measure was to stuff with AIM shares. Surely this is now more enticing, not less.

Ciprico

Yeah the more clued up realised my error. Should have read SIPP.. now fixed.

Wait for autumn statement next week....

coastline

Well £325,000 basic IHT allowance is pretty low considering what the purpose was decades ago. It's hitting ordinary folk in the country with modest homes. Yes there's a doubling up if you're married and a £175,000 housing allowance but it's never been increased for years . Basic allowance would be £500,000 if inflation was added since last calculation. I've read lifting to a simple £500,000 per person wouldn't cost much at all and a few billion at most. Why single people don't get the £175,000 housing is a bit unfair really when they have family to leave money to. No different to anybody else.