are pension withdrawals classed as "income"

Triumph13

Thanks for the excellent flowchart. I had missed the issue around pre/ post 2024.

Hopefully it won't be an issue (touch wood!) but if I should die pre 75 does anyone know how they would handle a pot where 90% was crystallised pre 2024 and 10% after?

I have a crystallised pot with ii that has already used almost all the LTDBA and a couple of small work pots as yet untouched. I had been planning to transfer them to ii, via HL for one to get the small pots, but now wondering if I should keep them separate and draw them down fully?

Quidditch

I guess in any event, this aggressive gifting is subject to the 7 year rule - if it fails the regular gifting provision - and as I understand it, some of the value is written out of the estate before the 7 years are up.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82162425#Comment_82162425

I think it is the rate of tax which reduces not the amount of the gift. Also the failed PETs will use up the donor's nil rate band (not sure about any RNRB or transferred nil rate bands). I might be wrong but that could be an unfortunate combination.

Dead_keen

I guess in any event, this aggressive gifting is subject to the 7 year rule - if it fails the regular gifting provision - and as I understand it, some of the value is written out of the estate before the 7 years are up.

Not quite, if it is a failed PET it stays in the seven year period in full. The only tapering is of the tax on the failed PETs to the extent that it exceeds the nil rate band. So, for example, a single person with no kids:

• £100,000 PET, £500,000 in estate, taxable estate is £600,000 so £275,000 is taxable at 40% (£110,000) and this is payable by PR
• £500,000 PET just before death, £100,000 in estate, taxable estate is £600,000 so £275,000 is taxable and this is payable by the recipient of the failed PET (£70,000 = £175,000 x 40%) + PR (£40,000 = £100,000 x 40%).
• £500,000 PET six and a bit years before death, £100,000 in estate, taxable estate is £600,000 so £275,000 is taxable and the tax is payable by the recipient of the failed PET (£14,000 = £175,000 x 40% less 80% taper) + PR (£40,000 = £100,000 x 40%).