Change of tac, dying below the IHT threshold

zagfles

Aretnap said:

zagfles said:

Why not just buy an annuity, after you've spent the TFLS on the silly car club or whatever. Then there is zero left for "the man" (or "the woman" ) when you and your wife (assuming you get a joint one) pop your clogs. If you're only going to draw down 3.5% you could probably get an index linked annuity for more than that at 60. 

Good idea, but the risk is that if they both die relatively young, the insurance company (who is also, presumably, "the man") might get some of his money, and we can't have that can we?

Safest option is probably just to burn a load of cash - then there's no risk of anyone you disapprove of getting it.

Err, no. The insurance company doesn't "get some of his money" if he dies young. Instead, people who live to 100+ get some of his money. That's how insurance works. Just like those who never claim on their house insurance or car insurance pay for those who do claim. 

Sarahspangles

zagfles said:

Aretnap said:

zagfles said:

Why not just buy an annuity, after you've spent the TFLS on the silly car club or whatever. Then there is zero left for "the man" (or "the woman" ) when you and your wife (assuming you get a joint one) pop your clogs. If you're only going to draw down 3.5% you could probably get an index linked annuity for more than that at 60. 

Good idea, but the risk is that if they both die relatively young, the insurance company (who is also, presumably, "the man") might get some of his money, and we can't have that can we?

Safest option is probably just to burn a load of cash - then there's no risk of anyone you disapprove of getting it.

Err, no. The insurance company doesn't "get some of his money" if he dies young. Instead, people who live to 100+ get some of his money. That's how insurance works. Just like those who never claim on their house insurance or car insurance pay for those who do claim. 

Perhaps Workerdrone would come back and haunt the surviving annuitant as the Ghost of Annuity Unspent.

FIREDreamer

Aretnap said:

zagfles said:

Why not just buy an annuity, after you've spent the TFLS on the silly car club or whatever. Then there is zero left for "the man" (or "the woman" ) when you and your wife (assuming you get a joint one) pop your clogs. If you're only going to draw down 3.5% you could probably get an index linked annuity for more than that at 60. 

Good idea, but the risk is that if they both die relatively young, the insurance company (who is also, presumably, "the man") might get some of his money, and we can't have that can we?

Safest option is probably just to burn a load of cash - then there's no risk of anyone you disapprove of getting it.

The insurance company profits from an earlier than expected death - guess who they pay tax to. ☹️

Bostonerimus1

The actuarial calculations will make sure the insurance company makes money, but the mortality credits will be factored into the annuity rates and those that live longest will see the greatest benefit

FIREDreamer

FIREDreamer said:

Aretnap said:

zagfles said:

Why not just buy an annuity, after you've spent the TFLS on the silly car club or whatever. Then there is zero left for "the man" (or "the woman" ) when you and your wife (assuming you get a joint one) pop your clogs. If you're only going to draw down 3.5% you could probably get an index linked annuity for more than that at 60. 

Good idea, but the risk is that if they both die relatively young, the insurance company (who is also, presumably, "the man") might get some of his money, and we can't have that can we?

Safest option is probably just to burn a load of cash - then there's no risk of anyone you disapprove of getting it.

The insurance company profits from an earlier than expected death - guess who they pay tax to. ☹️

Bostonerimus1 said:

The actuarial calculations will make sure the insurance company makes money, but the mortality credits will be factored into the annuity rates and those that live longest will see the greatest benefit

I was referring to a single death (the OP) rather than a specific cohort. The government will get its money regardless.

SVaz

You have an amount most people can only dream of so stop worrying and enjoy the money.   

zagfles

It's all getting a bit obtuse. If OP left money to his kids they might spend it on stuff that attracts VAT, excise duties etc, or might buy things that make companies profits on which they pay corporation tax 

If he burns the money that's worse, it's just cancelling money, effectively giving the money to "the man". 

He should take up a an ultra healthy lifestyle and live to 110 having blown all his pension on fast cars, loose women and wasting the rest, gamble his house away so he has to claim housing benefit as well as state pension for 40+ years. That'll stick it to "the man"

Bostonerimus1

FIREDreamer said:

FIREDreamer said:

Aretnap said:

zagfles said:

Why not just buy an annuity, after you've spent the TFLS on the silly car club or whatever. Then there is zero left for "the man" (or "the woman" ) when you and your wife (assuming you get a joint one) pop your clogs. If you're only going to draw down 3.5% you could probably get an index linked annuity for more than that at 60. 

Good idea, but the risk is that if they both die relatively young, the insurance company (who is also, presumably, "the man") might get some of his money, and we can't have that can we?

Safest option is probably just to burn a load of cash - then there's no risk of anyone you disapprove of getting it.

The insurance company profits from an earlier than expected death - guess who they pay tax to. ☹️

Bostonerimus1 said:

The actuarial calculations will make sure the insurance company makes money, but the mortality credits will be factored into the annuity rates and those that live longest will see the greatest benefit

I was referring to a single death (the OP) rather than a specific cohort. The government will get its money regardless.

Yes the death of an individual is obviously a sad and meaningful event. To Government and insurance companies it's just another data point.

Bostonerimus1

As a UK expat with US pensions that will not be excluded from my estate if I return to the UK, my estate will have a very nasty tax bill if I don't do some fairly farsighted planning ie. paying income tax on all my pensions while I'm living and giving money away. The UK IHT on my US pensions could mean that my beneficiaries would have to take lump sum withdrawals to pay the IHT and so be also taxed at a high income tax rate. It would make the effective tax rate 66.6..% if the IHT and the Income tax are 40%...that's a hellish amount.

Workerdrone

Aretnap said:

zagfles said:

Why not just buy an annuity, after you've spent the TFLS on the silly car club or whatever. Then there is zero left for "the man" (or "the woman" ) when you and your wife (assuming you get a joint one) pop your clogs. If you're only going to draw down 3.5% you could probably get an index linked annuity for more than that at 60. 

Good idea, but the risk is that if they both die relatively young, the insurance company (who is also, presumably, "the man") might get some of his money, and we can't have that can we?

Safest option is probably just to burn a load of cash - then there's no risk of anyone you disapprove of getting it.

For the avoidance of doubt, the man very specifically in question is the labour government and any policies they put in place. I've no issue with insurance companies, that's a risk I can choose to take, nor how charities, my kids or even minor political parties choose to spaff up the wall what I give, again, my choice. But to only receive 20% tax relief, do the sensible thing and save for tomorrow, then to have 40% liberated from the growth and risks ive taken by a left wing government. no thank you.