Work Hard And Provide For Your Retirement........

ToraToraTora | 11:52 Mon 16th Dec 2024 | News

83 Answers

https://www.telegraph.co.uk/money/tax/inheritance/stolen-my-happy-retirement-letter-shames-rachel-reeves/

....and Labour will give it to someone who didn't.

Has this theiving government no shame?

So We're In A Doom Loop.....

The Decline Of The Uk Towards A 3Rd World Dump

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newmodarmy

Are you forgetting TTT that the pension contributions attracted tax relief at source, probably at 40%. So taxing the income (probably at 0% or 20%) is only cancelling out some of the tax relief, and is what happens with any source of income. And taxing the pot as part of the estate value for IHT is no different to taking IHT from the value of savings or property.

bednobs

how many poeple have penions they can leave to their children?

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20:24 we are talking about draw down funds. Once it's been used to buy an annuity then it won't be an issue.

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...and they are very common

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"Are you forgetting TTT that the pension contributions attracted tax relief at source, probably at 40%. " - yes and they'll get taxed as income when they are taken as they have for the last century or so.

Ellipsis

Before the Budget: the IHT would have been £200,000

After the Budget: the IHT will be £640,000

What is the minimum financial situation of this 70-year-old?

newmodarmy

My drawdowns are not classed as an annuity as far as I know. I just draw down from the pension pot. It's effectively just drawing down on a savings pot.

And don't forget 25% (for all but the huge pots) can be withdrawn tax free.

bednobs

are they common? how long are they paid to children? do their children then inherit it?

newmodarmy

//yes and they'll get taxed as income when they are taken as they have for the last century or so.//

Yes Ive already said that. Seems fair enough, especially as the relief here was at 40% and the drawdown incomes may be at only 20% (or even 0%). But I'm glad you accept it's always been the case that income is taxed.

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20:29 no, the draw down fund can be used to buy an income for life at any time (It must be done by 70 anyway, I think but that may have changed) , it then ceases to be a DDF, the money is gone and you get an income until you die.

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20:31 if the pot is unconverted to an annuity then yes it's an asset that can be given in a legacy. The recipient must pay tax on it as income.

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20:32 Of course income is taxed I'm talking about IHT straight off the top of the pot.

newmodarmy

I think you're wrong , you don't have to draw down for life, you can draw down chosen amounts over set periods.

But I'm leaving you to it. This is a niche issue and I doubt there's much sypathy for very well off individuals and potentuially very well off beneficiaries when so many ordinary folk are struggling and the nation's finances are not looking good

newmodarmy

Last word

//I'm talking about IHT straight off the top of the pot.//

Yes it should be treated the same for IHT as all other assets in an estate. The rate may be too high or the allowances too lw, but that's a separate issue.

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why it's treated as income when taken, so taking it as IHT up front as well is taking the peace. So out of £1m , tax is potentially £640,000! You are happy with that? right oh!

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That's why it's treated as income when taken, so taking it as IHT up front as well is taking the peace. So out of £1m , tax is potentially £640,000! You are happy with that? right oh!