If these pots are surplus to income need, then you can draw a regular income and gift to family. Gifts out of excess income if made frequently and don't impact lifestyle are immediately out of your estate for IHT.
Indeed, it’s one of the lesser known IHT reliefs that’s out there, but I would suggest not many people know about it, and such a strategy would ‘convert’ capital to income and make it achievable
Great video especially about making sure don’t have a pension that transfers, rather than pays out on death is really important, but let’s look at at double taxation as it’s not so simple. Assuming 40% tax, but you could apply the same to 45%. Let’s look at £500k pension. If I put £300k into my pension it would be worth £500k with tax relief, or I could buy £300k ISA. Assuming no growth, but in reality the pension would grow more as there is more money in it. After IHT the ISA will leave £180k and the pension will leave £300k. If the pension is drawn down at a 40% marginal tax rate the total is the same, both leave £180k
Thanks for the video, could you do one on inherited stocks and shares ISA's
Could it be Labour is closing up all the lose ends when your receiving funds,from pensions and investments so no extra income can be added.
If these pots are surplus to income need, then you can draw a regular income and gift to family. Gifts out of excess income if made frequently and don't impact lifestyle are immediately out of your estate for IHT.
Indeed, it’s one of the lesser known IHT reliefs that’s out there, but I would suggest not many people know about it, and such a strategy would ‘convert’ capital to income and make it achievable
Does this include state pension or just private pensions?
Private pensions… State Pensions tend to stop when you die… there is no ‘pot’ as such to pass on to beneficiaries
Small Self Administered Schemes are the way to go IMO as you can put offspring in as beneficiaries.
Great video especially about making sure don’t have a pension that transfers, rather than pays out on death is really important, but let’s look at at double taxation as it’s not so simple.
Assuming 40% tax, but you could apply the same to 45%. Let’s look at £500k pension.
If I put £300k into my pension it would be worth £500k with tax relief, or I could buy £300k ISA.
Assuming no growth, but in reality the pension would grow more as there is more money in it.
After IHT the ISA will leave £180k and the pension will leave £300k.
If the pension is drawn down at a 40% marginal tax rate the total is the same, both leave £180k
Move to A J BELL its easy and sensible .