Pension beneficiary lives overseas

lucyandthomas

af1963 said:

If he's already a 40% taxpayer, so any additional withdrawals will be taxed at (at least ) 40%, how is that any better than leaving it alone and potentially paying 40% IHT later ?

Well if he pays the 40% tax on regular withdrawals now and then gifts if immediately as surplus income, that will presumably be all the tax payable, except on any interest exceeding allowance (i.e. we will be able to avoid paying 40% IHT PLUS income tax when my brother and I withdraw it). But yes, I take your point about how expensive care can be.

af1963

Do you know what his likely overall estate will be for IHT ? And is there a nil-band that he may have inherited from your mother ?  And one or two main residence allowances ? Depending on the answers, the pension may not be liable for any IHT, or only partially.  Whereas for any withdrawals, he'd pay 40% immediately on the lot.

german_keeper

af1963 said:

... lives comfortably on his DB and state pensions. These should cover any future care needs without need for his pension.

Maybe. Care can cost a lot.  £80k a year is not unusual, sometimes more.  Not everyone ends up needing it, but for those who do, resources can disappear fast.

And the rest! My mum's care costs £4k per week. However I can't believe that anyone needing that level of care wouldn't be state funded, either Section 117 or CHC.