Did "Geoff" pay income tax on his pension contributions? No, he got a 40% tax rebate. So no tax has been paid on his income, why should his kids not pay the tax?
his pension is 100k not the value of his estate 😉 the value of his estate must be more than 325k or 650k or a million pounds etc depending upon geoff’s situation.
Good video and this is an absolute nonsense tax, disgracful. In the scenario shown I think there could be some clever planning and arguing that passing that gift onto your children is exempt as it's from surplus income. I know there will be counter arguments to say it's not income because it's a one-off lump sum - I think the income argument would prevail. But then there are other conditions to meet e.g it has to be a regular gift, but I think those arguments could be overcome, or even gift it over a few months.
You fail to mention nil rate band for IHT. Also, Geoff will have been thankful for NHS. That's why we have tax. Pensions are to provide income in retirement, no a means to pass wealth down the generations, without paying tax on the way in and way out.
This video is the mitigation plan to the 87% tax on pensions, where I went through the details of all IHT bands and rates: th-cam.com/video/myyeQwdaKx0/w-d-xo.html
Cheers again for your great, informative but easy to understand video. Much appreciated, Simon. 🙏
Glad it was helpful! 🙏
Did "Geoff" pay income tax on his pension contributions? No, he got a 40% tax rebate. So no tax has been paid on his income, why should his kids not pay the tax?
Who said he was a big tax earner and got tax relief across his working life? That may not be true at all.
As the £100,000 is below his 325k IHT allowance, Geoff's estate would pay a big fat zero.
his pension is 100k not the value of his estate 😉 the value of his estate must be more than 325k or 650k or a million pounds etc depending upon geoff’s situation.
Please see 3.54 where it states that we have ignored the IHT lifetime allowances based on the fact the allowances are used up elsewhere
Good video and this is an absolute nonsense tax, disgracful. In the scenario shown I think there could be some clever planning and arguing that passing that gift onto your children is exempt as it's from surplus income. I know there will be counter arguments to say it's not income because it's a one-off lump sum - I think the income argument would prevail. But then there are other conditions to meet e.g it has to be a regular gift, but I think those arguments could be overcome, or even gift it over a few months.
There are options around this theft tax 👍
You fail to mention nil rate band for IHT.
Also, Geoff will have been thankful for NHS. That's why we have tax. Pensions are to provide income in retirement, no a means to pass wealth down the generations, without paying tax on the way in and way out.
See 3:51 where I state ignoring lifetime allowances because they are used up on other assets
This video is the mitigation plan to the 87% tax on pensions, where I went through the details of all IHT bands and rates: th-cam.com/video/myyeQwdaKx0/w-d-xo.html