IHT Payment

newatc

My plan for taking some hassle out of probate/IHT payment, I had planned to keep our private pensions ( of moderate value in scheme of things) in place which could have been paid very quickly and used to pay any IHT.
The recent budget changes has made me now decide to go down the annuity route which means I need to rethink IHT payment. My initial thought is to maintain cash savings for this purpose but perhaps using savings in fixed term bonds over possibly 5 or 6 suppliers.
Does anyone have knowledge/opinion on our easy it would be to get these banks/BSs (including NSI) to pay HMRC direct.

Keep_pedalling

HMRC have a direct payment scheme where cash tied up waiting for probate can be released direct to HMRC to pat IHT. 

newatc

Thanks KP. Yes I knew about the direct payment   but theory and practice can sometimes not meet and I understand that not all banks are members of that scheme.

Keep_pedalling

Another option you can look at is keeping any cash savings held by one institution below the level that they will require probate for.

EasySolution

Some Banks and Building Societies just accept the IHT 423

One Bank requires a whole pile of supporting paperwork.

One institution requires the application to be delivered by a person on the back of a horse  (well that's what it feels like when they come up with yet another requirement)

NS&I will release but you have to make a case with them and show that you have tried other avenues first.

newatc

That's what I fear EasySolution. Still I don't think there's much I can do as I suspect insurance would be massive at our age.

Runner_Duck

18 months ago NS&I paid money for IHT without any issues at all. I just sent them Schedule IHT 423 and that was that. Persuading them to close the account post probate was a different matter. As you have discovered not all banks participate in the Direct Payment scheme and there does not appear to be a list anywhere.  Tedious to do but you could probably find out by Googling each institution and looking for 'what to do in the event of death'.

artyboy

While I can see that the IHT changes may psychologically shift more people back towards annuities, I just don't see it as a persuasive argument, at least for anyone with children or other putative beneficiaries.

Yes, I'm spitting feathers about what this will likely cost my estate when I die, but ultimately I still expect to be able to draw down at a similar rate to what an annuity will give me. I accept that the investment risk remains with me - and I guess that may be the kicker for some - but it should still leave a decent residue after I kick the bucket, so even after a solid gouging by HMRC, it gives something to pass down.

newatc

artyboy said:

While I can see that the IHT changes may psychologically shift more people back towards annuities, I just don't see it as a persuasive argument, at least for anyone with children or other putative beneficiaries.

Yes, I'm spitting feathers about what this will likely cost my estate when I die, but ultimately I still expect to be able to draw down at a similar rate to what an annuity will give me. I accept that the investment risk remains with me - and I guess that may be the kicker for some - but it should still leave a decent residue after I kick the bucket, so even after a solid gouging by HMRC, it gives something to pass down.

There is another reason in my case (in that it would easier for my younger wife should I go first) so the IHT issue just tips the decision.