Diabolical pension inheritance tax on death 2027.

squirrelpie

I know what I need

How do you know how much you will need for care? I don't even know what medical conditions I'm going to suffer from, let alone how much they will cost.

Cobbler_tone

https://forums.moneysavingexpert.com/discussion/comment/81981451#Comment_81981451

You're right. Why ever stop working and accumulate the highest amount of wealth possible in case of every eventuality?

I can have a very decent punt at what I need for a comfortable existence for the rest of my days, whilst helping my loved ones when I can in the cleanest manner. If I don't have a huge war chest at some point in the future, I'll face that like millions of other people….not forgetting, that everyone's personal situation is very different.

The generation before me are very much "you'll get it when I've gone."

NormalNorman

With wife and I having been executors you can't help thinking some aspects of death planning could have been done better/simpler/cheaper as passing away is expensive.

If you think you are going to get caught in IHT then simply give with warm hands regularly, pass down trinkets to save steep valuation costs and bickering later on, document finances etc.

For example, we've gifted to daughter [JISA & pension] since birth and any random lump sums now just get passed to her as an adult too as we have more than enough. With seven DB [age 60, 65 & 67] and two SP [age 67] our DCs are there to be spent making memories.

Indeed, backed off pension contributions slightly preferring ISA as it could well end up being quite the tax trap for us from 2031, Scottish perspective. IHT, HRT starting £43663, frozen personal allowance and inflation has changed my outlook. HMRC boot on throat springs to mind.

Not specifically planning for any care as there will be DB/SP and a paid off house if need be. Alongside daughter should be able to get on the property ladder with a small mortgage [if any] from money passed over many many years prior. Going by elderly family they have bought in help when needed from a nurse to cleaner, gardener etc. The NHS will often install adaptations for you, visits from district nurses, non means tested benefits may be paid too so who knows what the future holds health wise….

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81981451#Comment_81981451

Studies have shown that spending in retirement usually follows a "U" shaped profile. In the early years people spend on holidays and are still active, in the middle years people spend less as their horizons become more restricted and then at the end spending increases as health and care issues escalate. With care in the UK becoming means tested and the NHS and local authorities reducing services and for-profit companies stepping in, the cost of the final years is hard to estimate. It would help if long term care insurance was readily available, but it's not. This is one of the areas of life and personal finances that needs serious attention from government. I don't think DC pension balances are a good way to pay for long term care.

QQQQQQQQ_Y

https://forums.moneysavingexpert.com/discussion/6666118/diabolical-pension-inheritance-tax-on-death-2027

Quite diabolical as you say. Imagine that, pension tax relief being used to encourage people to fund a pension instead of the rest of us funding someone else's tax avoidance scheme - the cheek of it, where will it end?

Marcon

It'll be interesting to see how many people who transferred from a DB pension to a DC arrangement primarily because they saw it as a means of avoiding/reducing IHT now start squawking for compensation because their adviser didn't make it clear enough that legislation could change, or didn't try hard enough to stop them…

Moonwolf

https://forums.moneysavingexpert.com/discussion/comment/81980791#Comment_81980791

I was talking to my French tutor about this, she doesn’t make a lot, all her translation work has dried up with AI. She lives with her widowed mum in a family home which was originally bought by her grandfather, her mum is my age. She will almost certain to have to pay tax on the house when her mum dies and is trying to save for it now or she will lose the house. Although the tax rate is low, it starts at 5%, even for children there is a very low nil rate allowance, about £150,000 I think. It is 40% at £2 million and can be higher for other relatives.

Qyburn

https://forums.moneysavingexpert.com/discussion/comment/81982188#Comment_81982188

There'll be some complaint along those lines even if the advisor advised against the transfer. And complaining against the rereceiving scheme as well.

BlackKnightMonty

https://forums.moneysavingexpert.com/discussion/comment/81981551#Comment_81981551

give with warm hands regularly.

Spot on. It’s so challenging economically now as a young person, any help goes a long way.

We will likely be in our late 50s / 60s before any inheritance or wealth sharing and will simply pass it down and give our kids the early boost we never received.

kempiejon

We will likely be in our late 50s / 60s before any inheritance or wealth sharing and will simply pass it down and give our kids the early boost we never received.

I'd like to echo warm hands gifting. I had this chat with my dad before he died, I told him I didn't need his money and it could go straight to the grandkids, he bristled a bit as the money was for my siblings and me not our kids. He and mum had put money aside to bequeth to their kids that was their plan. Getting it in your 60s when your kids are in their 30s doesn't necessarily seem like the best use of that generational wealth.

My dad's monther died in her 90s when he was in his 70s.