Personal and savings tax allowance questions

kermchem

https://forums.moneysavingexpert.com/discussion/comment/81863786#Comment_81863786

The sentence that I pasted was a direct quote from (pasting a url, it is hmrc) https://www.gov.uk/apply-tax-free-interest-on-savings where it says "You’re not eligible for the starting rate for savings if your other income is £17,570 or more", but I think the implication is that you do still get the starter rate for savings if your savings income is £40K, but your "other income" (which means wages or pension) is under £17,750.

The lesson for me is that hmrc, when talking about savings, use the words "other income" to mean some defined income (wages or pension) other than savings.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81854554#Comment_81854554

What happens to my HL investments when I die | HL

The above may help.

Broadly you can leave a gilt to someone when you die (it doesn't have to be specified in your will you could just leave all your assets to someone) and it doesn't have to be sold. But that can depend on other factors such as whether there is a large IHT liability which needs to be paid and selling the gilt is a way to pay it. I am also not totally sure what happens if you hold it in an ISA.

The CGT free treatment of gilts doesn't depend on them being held to maturity. If you (or your PRs) sell it early then the gain is CGT free (assuming there is a gain! If there is a loss that is also outside CGT so can't be used against any CGTable gains).

But one thing I believe is still true is that you get a CGT uplift on death so any assets you own at death are treated as passing to your PRs at the value at the date of death and there is no CGT payable on that event. So if you die the CGT free status of gilts doesn't matter so much.

But the bottom line is the gilts can be passed to your beneficiaries and there will be no CGT to pay when they mature or when they are sold.

poseidon1

Another ( largely unknown), tax benefit of holding gilts personally is they are excluded property for IHT purposes for non resident Brits who die abroad.

Under the revised domicile and residence rules, a non resident British person who dies abroad remains exposed to IHT on their worldwide assets for up to 10 years after departing these shores.

The FOTRA security rules exempts gilts from IHT charge in these circumstances - see below -

https://www.taxadvisermagazine.com/article/fotra-securities-question-residence-inheritance-tax

And

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm04293

HeadScratching

https://forums.moneysavingexpert.com/discussion/comment/81853570#Comment_81853570

These are roughly our circumstances, although we do also have small PPs and annuities - and an appointment has been made with our accountant and I am a little better informed than before!

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81866067#Comment_81866067

Just keep in mind that the taxable income you get from the PPs and annuities will count as non savings non dividend income so you will want to keep an eye on how much that is.

HeadScratching

https://forums.moneysavingexpert.com/discussion/comment/81867396#Comment_81867396

Thank you. We've no need to touch our PPs yet and can't touch the annuities for 13 years

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81869415#Comment_81869415

Ah Sorry when I see the word annuity I think of an immediate annuity which is currently paying you an income. What you have sounds like a deferred annuity.