Pension Fund and IHT proposals

TallGuy2

My pension pots are fully "chrystallised" and I am drawing pensions therefrom. There are named beneficiaries for any remaining pot to provide benefits on my death. As such my pension pot is fully allocated/designated. Will the new proposals catch me?

I think I can see that the proposals would catch people who have not chrystallised some or all of their pot and were leaving it untouched so that it could be passed on intact.

Albermarle

TallGuy2 said:

My pension pots are fully "chrystallised" and I am drawing pensions therefrom. There are named beneficiaries for any remaining pot to provide benefits on my death. As such my pension pot is fully allocated/designated. Will the new proposals catch me?

I think I can see that the proposals would catch people who have not chrystallised some or all of their pot and were leaving it untouched so that it could be passed on intact.

What matters is if your total estate, including your unused pension pots, will be liable for IHT, or not.
If it is the fact your unused pots are crystallised is not relevant.

dunstonh

Will the new proposals catch me?

Yes. Everybody with funds will be subject to the rule changes.   However, the impact will vary depending on personal circumstances.

I think I can see that the proposals would catch people who have not chrystallised some or all of their pot and were leaving it untouched so that it could be passed on intact.

It makes no difference whether its uncrystallised or crystallised.   Its the monetary value of the fund that matters in relation to your estate.

Linton

I cant see any reason why crystallised pensions should be taxed diffrently to uncrystalised ones.Your suggestion that IHT would only be charged on uncrystalised pensions does not make sense to me - it would make tax avoidance trivially easy.   However we have not had the detailed proposals. 


 Most people's estates are too small for IHT to be charged.

TallGuy2

Linton. Try telling that to a GP or Surgeon, or anyone who owns a house (or two).

It also means anyone who has built up, and planned their future, on decent pension provision is screwed.

Albermarle

TallGuy2 said:

Linton. Try telling that to a GP or Surgeon, or anyone who owns a house (or two).

It also means anyone who has built up, and planned their future, on decent pension provision is screwed.

Your pension provision whilst alive/retired is unaffected as any changes to IHT on pensions, will only affect you when you are dead.

NHS staff  are completely unaffected as they have public sector defined benefit pensions, where there is no unused pot to pass on.

TallGuy2

There are survivors' benefits.

AlanP_2

TallGuy2 said:

There are survivors' benefits.

There are with DB schemes but they are not relevant as regards inheritance tax.

Linton

TallGuy2 said:

There are survivors' benefits.

The survivor gets the benefits in their own right, not through inheritance. In any case DB is an income, not a pot of money,so is taxed in exactly the same way as wages.

More_complicated_than_that

Linton said:

TallGuy2 said:

There are survivors' benefits.

The survivor gets the benefits in their own right, not through inheritance. In any case DB is an income, not a pot of money,so is taxed in exactly the same way as wages.

I have no idea but Appendix B here lists authorised death benefits that are included in the value of the estate for IHT purposes: https://www.gov.uk/government/consultations/inheritance-tax-on-pensions-liability-reporting-and-payment/technical-consultation-inheritance-tax-on-pensions-liability-reporting-and-payment#annex-b-authorised-pension-death-benefits-included-in-the-value-of-an-individuals-estate-for-inheritance-tax-from-6-april-2027

Lemon_dr1zzle

DB death grants will be in scope for IHT.