The UK Politics & Brexit Thread

[st13phil]

Note this business of applying inheritance tax to pensions is a complex undertaking which will be why it doesn't come into effect until 2027. This is similar to the issue they ran into with the lifetime allowance when they had to abandon reintroducing it because it was just too difficult. Perhaps there is hope yet of this new change also being abandoned.

From what I can see it only applies to DC pension pots, so on the surface it wouldn't be too difficult to implement.

It's still a spiteful move though that is unlikely to achieve much additional tax revenue while simultaneously improving the income of tax planners and lawyers.

 

[190]

As is regularly said, Inheritance Tax is an optional tax, paid by the naive.

Even if you pop your clogs ridiculously early, the workarounds are pretty simple

If it's that easy to avoid why do we have to pay big sums to get tax experts to do it for us. last time I checked setting up a trust wasn't cheap.

 

[John N]

As is regularly said, Inheritance Tax is an optional tax, paid by the naive.

Even if you pop your clogs ridiculously early, the workarounds are pretty simple

In order to relieve my "Naivety" could you please expand on that?

Asking for a Friend, obviously!

 

[markjay]

In order to relieve my "Naivety" could you please expand on that?

Asking for a Friend, obviously!

Offshoring (expensive and illegal), family trusts (expensive and legal), changing your tax residency to a county with no IHT then selling all your UK assets. Other routes also available...

(Before today, you could also buy a farm for the sole purpose of leaving it to your heirs)

 

[MikeInWimbledon]

If it's that easy to avoid why do we have to pay big sums to get tax experts to do it for us. last time I checked setting up a trust wasn't cheap.

Most inheritance tax avoiders aren't setting up trusts. They're using gifts, exempt transfers, "more sophisticated" release, and various dodgy bond transfers.

Portugal, Spain, and a few other EU countries are busily welcoming Brits with more generous rules on Pension drawdown and Inheritance Tax. Once resident, there's nowt to stop you visiting the UK regularly.

And for those who are wealthy enough to have that challenge, a few thousand to set it up, following by a bit less than 1% a year is a small amount to pay for avoiding IHT while also getting reliable professionals to oversea a pot which is destined to look after long term care for the old, and wise investment for the young?

(There's a chap I know who struggles to live on the million a year income from the family trust, even though he has use of the trust's houses. His expired old Dad will be happy that the trust is paying its well negotiated annual fees to keep family affairs in good shape)

As always, don't rely on chaps on the Internet, but this is bread and butter to your family solicitor.

 

[st13phil]

Message to Rachael from Accounts from the Bond Market:

Methinks they're not impressed...

 

[st13phil]

According to the OBR, the average growth rate of the UK economy over the next few years is 1.58%. So when does the 'growing the economy to finance public expenditure' policy kick in?

 

[MikeInWimbledon]

According to the OBR, the average growth rate of the UK economy over the next few years is 1.58%. So when does the 'growing the economy to finance public expenditure' policy kick in?

When the Covid hangover and the Socialist government has gone?

The good news: both Germany and France are in a worse state than the UK, at the moment. (Schadenfreude?)
The bad news: Trump seems like a slam dunk for next Tuesday, and the US economy will continue to leave us in the dust.

Will the ambitious move to the States or Australia? Obviously, but again that's an old UK Labour party tradition.

 

[Dryce]

From what I can see it only applies to DC pension pots, so on the surface it wouldn't be too difficult to implement.

It's still a spiteful move though that is unlikely to achieve much additional tax revenue while simultaneously improving the income of tax planners and lawyers.

I'm not sure its spiteful.

However - it is problematic - pensions are long term things and the inheritance treatment of private pension pots has impacted decision making for some pensioners - whether that be making additional contributions - choosing drawdown over annuity - deferring draw down - or even switching a defined benefit pension to a private pension pot.

OTOH the inheritance aspect of private DC pension pots isn't unfair as a tradeoff when compared with the security and assurances of many of those with public sector defined benefit pensions.

 

[Dryce]

According to the OBR, the average growth rate of the UK economy over the next few years is 1.58%. So when does the 'growing the economy to finance public expenditure' policy kick in?

Question is when looking at per-capita how much of that 1.58% is offset by population growth.