Do not need my SIPP

Bostonerimus1

andy6247 said:

Mark_d said:

Trying to split your pension wealth now will likely incur a lot of tax.  Why are you looking to divide your wealth before death?

I was looking to set up pensions for my two sons as I understood they would be liable for income tax on my fund on my death. Am I now right in thinking that on my death my fund could be split and transferred to sons without a tax liability?

Make sure that your sons are equal beneficiaries of your SIPP, talk to the SIPP administrator and your solicitor. There won't be an inheritance tax bill on the SIPP, but your sons will, obviously, have to pay income tax on any withdrawals. You have been allowed to defer tax on the SIPP contributions and gains and it's only common sense that eventually there will be tax to pay on the withdrawals. Your sons will end up with a very nice extra stream of income or nest egg that they can let grow, tax deferred, and pass on to their children.

Linton

andy6247 said:

Mark_d said:

Trying to split your pension wealth now will likely incur a lot of tax.  Why are you looking to divide your wealth before death?

I was looking to set up pensions for my two sons as I understood they would be liable for income tax on my fund on my death. Am I now right in thinking that on my death my fund could be split and transferred to sons without a tax liability?

provided you die at age 75 or later the tax liability only arises once your sons start to withdraw money from the inherited pension in the same way as with their own pensions, not on your death,.  There is no extra tax arising from the pension being inherited.  If you die before 75 they wont even have to pay that.

LHW99

talk to the SIPP administrator and your solicitor.

In the UK, to keep an inherited pension out of the IHT net, you don't include it in your will.

So only your SIPP admin (platform) needs to know about your beneficiaries, not your solicitor.

Bostonerimus1 is in the US (I seem to remember) and things may well be different there.

Albermarle

provided you die at age 75 or later the tax liability only arises once your sons start to withdraw money from the inherited pension in the same way as with their own pensions, not on your death,.  There is no extra tax arising from the pension being inherited.  If you die before 75 they wont even have to pay that.

In the UK, to keep an inherited pension out of the IHT net, you don't include it in your will.

Although nobody knows for sure, there is a reasonable likelihood that both of these tax regimes related to passing on pension pots, are currently under scrutiny by the new Chancellor.
Probably something will change at some point, but no idea exactly what and when.

Stargunner

Albermarle said:

provided you die at age 75 or later the tax liability only arises once your sons start to withdraw money from the inherited pension in the same way as with their own pensions, not on your death,.  There is no extra tax arising from the pension being inherited.  If you die before 75 they wont even have to pay that.

In the UK, to keep an inherited pension out of the IHT net, you don't include it in your will.

Although nobody knows for sure, there is a reasonable likelihood that both of these tax regimes related to passing on pension pots, are currently under scrutiny by the new Chancellor.
Probably something will change at some point, but no idea exactly what and when.

How can the OP die before they are 75 when they have already stated in their first post that they are 77. 😆

Bostonerimus1

LHW99 said:

talk to the SIPP administrator and your solicitor.

In the UK, to keep an inherited pension out of the IHT net, you don't include it in your will.

So only your SIPP admin (platform) needs to know about your beneficiaries, not your solicitor.

Bostonerimus1 is in the US (I seem to remember) and things may well be different there.

It's similar in the US, although not as far as taxes are concerned, and the beneficiaries are named on the pension administrator forms and they pass directly to the beneficiaries without going through probate. However, it's always good to let your estate lawyer know that you have taken care of this and there might be issues with trusts etc. When drawing up a will and estate documents a full picture of your finances should be shared with your lawyer to avoid any nasty surprises. That's why I suggest talking with your solicitor, if only to let them know that you have correctly designated beneficiaries for SIPPs etc with the pension administrators.

kipsterno1

dunstonh said:

What does your financial adviser say when you ask them about the various solutions open to you?

Last time the OP asked about this they stated they didn't have a financial advisor.