One way or another

Argonauts

The old blondie hit springs to mind when one thinks of the beautiful Rachel Reeves

“One way, or another, I'm gonna find ya
I'm gonna get ya, get ya, get ya, get ya
One way, or another, I'm gonna win ya
I'm gonna get ya, get ya, get ya, get ya”

Had inheritance tax on my mind since retiring 

After last weeks budget now at front of my mind 

Obviously do not want to give govt anything but how does one make sure of that?

I’ve paid taxes all my life so why tax me again and again 

Currently 63 wife 62

Full state pension due in yrs to come 

Pensions

Me 

sold DB pension now DC 550 k

DC from work 400k

Sipp HL 100k cash sipp

Wife

Works Local Govt  pension 5k    a year  (It’s paid monthly )

Sipp HL cash 16k

Cash 300kin banks

Various yearly bonds etc 

ISAs in both names 160k

Split between us both 

House 220k no mortgage 

With 1 million pension 220k house 460k in banks  1.68 million total 

What to do next 

Who ever dies first the other inherits the other half tax free ? Is that true

When there’s only one parent left is it everything above £1 million is taxed at 40 %?

Is it still under 75 pension free to inheritor ? Could be wife or kids

Gifts can give away seen that 3k with another 3k from last yr ( that’s 12k can give away got two children ) me and wife give 6k each 

Currently taking money from H&L cash sipp just enough to not pay tax !

With interest from bank and sipp money staying under £18570 , when short of money take from EA accounts 

Should I start increasing my money from sipp to say £48 k I’ll pay 20% can give cash to kids as from income I believe ? This will get cash sipp down then when low enough to keep open could then move onto works pension DC currently 400k,

When getting state pension could reduce the 48k accordingly .

Want to reduce figure that’s left when we both go to under 1 million if that’s the current figure 

Had loads of holidays these last two yrs and more this year 

The amount of money we have is just climbing up it’s not going down !!

Pensions are rising but not touched 

Sipp goes down but interest comes in and lowers amount it drops 

Could take the full tax free from my other pensions that total 950k and give it to kids ?

Then hopefully live 7 yrs 

Trusts ?

What type of trust is best , kids don’t want any money of us ! They say spend it we are but I’d like to see them enjoy it and not the govt enjoy it 

Future govt may change it ?

I doubt it 

Has anybody got any suggestions for me 

Dazed_and_C0nfused

Is your wife currently working or is the £5k pension her only non savings non dividend income?

Argonauts

Wife retired that LG pension and money from her Sipp , keeping it under £18570 as interest is from various bank accounts 

all isas done this yr 

Sarahspangles

Argonauts said:

Currently 63 wife 62

Full state pension due in yrs to come 

kids don’t want any money of us ! They say spend it we are but I’d like to see them enjoy it and not the govt enjoy it 

If you want to see them enjoy it, start to spend it on them now.

DRS1

The kids say they don't want your money.  You want to save the IHT.  Solution: survivor in their will gives whatever is left all to charity.

Show the will to the Kids and see what they say then.

Madeinireland101

I’m in a similar position and I’m aiming to run down the pensions as much as possible - gifting to children, spending and also putting in ISA’s. Given things don’t change for a couple of years and there is a risk that something might happen to either of you before then I have changed my expression of wish on all pensions to distribute to children. At April 2027 this will return to spouse to allow them to continue running the pensions down - free of tax if I die before 75 and at their marginal rate after that.

Argonauts

Just been told that 
when there is one parent left that it’s 650k plus price of your house !!
id be 650 + 220 only 870k rest kier will tax at 40%

DRS1

It is not unknown for the first to die to give away up to their nil rate band to eg a discretionary trust or just outright to the kids.  In that case you will have less nil rate band to pass on to the spouse.

Albermarle

Argonauts said:

Just been told that 
when there is one parent left that it’s 650k plus price of your house !!
id be 650 + 220 only 870k rest kier will tax at 40%

Correct,
Remember that IHT is only payable on second death, and there is a good possibility at least one of you will reach 90, or more. Especially as all the extra tax we are paying should mean an ambulance will actually turn up if you have a heart attack. 
A lot can happen in that time, so I would not lose too much sleep about it. A good care home for a few years will soon make IHT less of a problem !

nicknameless

I'm with the kids. You did accrue in a pension to spend in retirement, not avoid IHT didn't you?

Triumph13

You are clearly spending way less than you can afford and just building up a bigger and bigger eventual IHT bill.  You could fairly easily give £500k to your kids now AND up your spending to £4k a month and still have plenty of leeway.  Maybe if they could see you doing the latter, the kids might be happier to accept the former?