Advice on IHT Please post budget

Qyburn

mgdavid said:

Surely it's not just about looking after dependents? My take is that retirement is a time to enjoy life to the full and do lots of the things one had neither time nor money for whilst working and raising a family. But the years and health start to catch up with you so the emphasis is on getting on with it as soon after retirement as possible. Later on you may/will be restricted in capability so the spend need will decrease.

I agree with your first point, but of course you can't do any of those things when you're dead. I don't understand how it relates to a more favourable treatment of your heirs if you die before your 75th birthday, rather than after.

Marcon

LHW99 said:

Qyburn said:

LHW99 said:

The problem occurs when the owner of the pot has been a BR taxpayer, whereas the recipients (children) may be at a higher rate. Granted possibly a small number, but the double tax will sting.

The recipients aren't forced to take so much it takes them into HR tax, that's entirely their choice.

As I said, a small number, but if it is an early death, where children are in their 40's / 50's and higher rate it could well happen, unless they are able to postpone taking withdrawals / or pass it directly to grandchildren by deed of variation.

So what if it does? They'll still be better off by the net amount, and much earlier in their lives than they might have expected.

RogerPensionGuy

Link below for information. 

The age 75 cliff edge was always pretty strange, a blend looked more sensible. 

I have followed pensions a lot over the years, I would rule nothing in or out, pension rules are treated like football, looking at how the pension cold weather payments have been pulled, I see as a sign that pensioners are in scope, a soft target for cash, but a PR disaster.

Reference pension rules and requlations, I suspect we will see more of the last two decades, the governments will keep changing them making planning very tricky. 

***

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/pensions-after-death

Qyburn

LHW99 said ..

As I said, a small number, but if it is an early death, where children are in their 40's / 50's and higher rate it could well happen, unless they are able to postpone taking withdrawals / or pass it directly to grandchildren by deed of variation.

It's still their choice, if they want an income that takes them into HR tax, they'll pay HR tax.

Triumph13

Qyburn said:

LHW99 said ..

As I said, a small number, but if it is an early death, where children are in their 40's / 50's and higher rate it could well happen, unless they are able to postpone taking withdrawals / or pass it directly to grandchildren by deed of variation.

It's still their choice, if they want an income that takes them into HR tax, they'll pay HR tax.

And what is their alternative if they already earn enough / have enough pension provision to use their 20% band? Leave it alone so IHT can take another 40% when they die?