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Savings and Investments thread

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  • edited October 30
    Rob7Lee said:
    Pensions falling into IHT from 2027  :s
    Looks like we'll have to spend spend spend!

    Was always my plan anyway, so nothing changes.
    I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.

    Just spend it ffs!
  • Rob7Lee said:
    meldrew66 said:
    Pensions falling into IHT from 2027  :s
    Can someone explain what this means/how this actually works please?
    As it stood, were you to die before 75, your pension pot (i.e. SIPP, not and DB scheme) passed to your survivors tax free. Now it will simply form part of your estate and be added to the overall estate.

    I.E. if you were single and had a home worth £400k and £100k in the bank your estate would not pay IHT as at the £500k limit. Now if you have to include say a £350k of pension pot on top you are now £350k over the limit and the estate would pay £140k in IHT. 

    It would be £325k, not £500k if one assumes that a single person does not have a direct descendant (child/grandchild) to leave it to.
  • The 2nd property Stamp duty increase was a big'un. Again comes in immediately.

    Imagine that might be adding to people's costs who are moving this Friday. 
  • SE9toDA2 said:
    @Rob7Lee if you were single your allowance is £325k not £500k assuming you have no children.

    so you would pay IHT on £175k plus the pension pot of £350k in your example from 2027
    If you are single with no children then your IHT bill shouldnt be an issue. Who's going to suffer ??
  • @golfaddick nieces and newphews who have no parents alive 
  • Unless there is something in the small print, she hasn't done anything to ISAs has she?

    As per the full Budget report at  https://assets.publishing.service.gov.uk/media/672232d010b0d582ee8c4905/Autumn_Budget_2024__web_accessible_.pdf

     

    “5.58 Individual Savings Accounts, Lifetime ISA, Junior ISA and Child Trust Fund

    Allowance – Annual subscription limits will remain at £20,000 for ISAs, £4,000 for

    Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2030.”

     

    “5.61 British ISA – The government will not proceed with the British ISA due to

    mixed responses to the consultation launched in March 2024.”

     

    I can find no mention of a cumulative ceiling but it does mean that there will be no adjustment to allow for inflation to the annual limit until at least 05 April 2030.


  • Rob7Lee said:
    NI the big one, £25bn!

    Thought CGT was going to be worse TBH.

    2% more for second homes has just killed any entry to BTL - sorry for anyone renting, your rents will be going up even more.

    Disappointed (but not surprised) to see pension now fall into IHT - Sounds like I need to spend spend spend or leverage a lot of debt.
    Don't understand the figures. I thought the speculation was 2% extra and would raise £20bn. Am I wrong? 
  • SE9toDA2 said:
    @golfaddick nieces and newphews who have no parents alive 
    Ok.......but that is not likely to affect many people. 

    And in that case you/they have over 2 years to address this. Start taking money out of the pension & spend it or give it to them directly. Or put the pension into Trust with them as beneficiaries. 
  • @golfaddick If take money out then will pay tax and Sliding scale IHT if die within 7 years of donation

    what I find strange is that you have a contract with a private company with terms and conditions that you have invested into over a number of years that the government just amend to suit them. There should be more transitional arrangements 
  • SE9toDA2 said:
    @Rob7Lee if you were single your allowance is £325k not £500k assuming you have no children.

    so you would pay IHT on £175k plus the pension pot of £350k in your example from 2027
    Correct, but an extra £175k if leaving home to descendants making £500k.

    redman said:
    Rob7Lee said:
    NI the big one, £25bn!

    Thought CGT was going to be worse TBH.

    2% more for second homes has just killed any entry to BTL - sorry for anyone renting, your rents will be going up even more.

    Disappointed (but not surprised) to see pension now fall into IHT - Sounds like I need to spend spend spend or leverage a lot of debt.
    Don't understand the figures. I thought the speculation was 2% extra and would raise £20bn. Am I wrong? 
    2nd (or more) homes currently attract 3% extra stamp. From tomorrow that’s 5%. We completed on a house last week, timing!!
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  • bobmunro said:
    Rob7Lee said:
    Pensions falling into IHT from 2027  :s
    Looks like we'll have to spend spend spend!

    Was always my plan anyway, so nothing changes.
    I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.

    Just spend it ffs!
    I agree, just changes my IHT planning. Will likely mean I retire earlier to give me a chance to spend it! Every cloud……
  • SE9toDA2 said:
    @golfaddick If take money out then will pay tax and Sliding scale IHT if die within 7 years of donation

    what I find strange is that you have a contract with a private company with terms and conditions that you have invested into over a number of years that the government just amend to suit them. There should be more transitional arrangements 
    If you are a basic rate taxpayer you will pay 20% income tax (over the 25% Tax free allliwance) on withdrawals (up to the 40% threshold). All depends on what levels of tax you pay. 

    And the contract you have with your pension provider hasn't changed at all. Governments regularly move rates & levels of reliefs. 

    In a way they are just balancing up an anomaly. No real justification on why pension assets should be outside of your Estate when all other assets are included. 
  • City not impressed by the looks of it!

  • A budget to kill growth.
    The OBR have been quite strong on their thoughts. Less growth, higher inflation than the BOE forecast & subsequently slower cutting of interest rates. 
  • A budget to kill growth.
    The OBR have been quite strong on their thoughts. Less growth, higher inflation than the BOE forecast & subsequently slower cutting of interest rates. 
    ....good for savers then?!
  • Does surprise me that there were NO changes to Pensions apart from now being part of your Estate.

    Tax free lump sum untouched 
    Tax relief untouched. 
    Lifetime & Annual allowances untouched 
    Don’t give them ideas Golfie, might come in the next budget!
  • I’ve just been robbed.
    Description - straight brown hair, navy blue suit, lipstick.
    Last seen in Westminster.
  • NB I was willing to pay more to help the NHS (and everything), but I didn’t expect to have to pay for a new hospital wing  :)
  • meldrew66 said:
    A budget to kill growth.
    The OBR have been quite strong on their thoughts. Less growth, higher inflation than the BOE forecast & subsequently slower cutting of interest rates. 
    ....good for savers then?!
    Only that interest rates might not fall as quick as was anticipated. Prior thinking was that there will be 0.25% cuts in both November & December and over the next 18-24 months the base rate should settle around 3.5%. 

    Maybe rates will have to stay higher for longer. Heard that somewhere before.
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  • Rob7Lee said:
    meldrew66 said:
    Pensions falling into IHT from 2027  :s
    Can someone explain what this means/how this actually works please?
    As it stood, were you to die before 75, your pension pot (i.e. SIPP, not and DB scheme) passed to your survivors tax free. Now it will simply form part of your estate and be added to the overall estate.

    I.E. if you were single and had a home worth £400k and £100k in the bank your estate would not pay IHT as at the £500k limit. Now if you have to include say a £350k of pension pot on top you are now £350k over the limit and the estate would pay £140k in IHT. 
    ‘e.g.’ I think you mean and not ‘I.e.’ 😉😉😀

    Sorry a pet hate for me when these aren’t used as I understand the grammar should be. 

    But I make you right it’s more logical to spend the pension pot or gift early to your beneficiaries than let it be swallowed in  tax. 
  • Rob7Lee said:
    meldrew66 said:
    Pensions falling into IHT from 2027  :s
    Can someone explain what this means/how this actually works please?
    As it stood, were you to die before 75, your pension pot (i.e. SIPP, not and DB scheme) passed to your survivors tax free. Now it will simply form part of your estate and be added to the overall estate.

    I.E. if you were single and had a home worth £400k and £100k in the bank your estate would not pay IHT as at the £500k limit. Now if you have to include say a £350k of pension pot on top you are now £350k over the limit and the estate would pay £140k in IHT. 
    ‘e.g.’ I think you mean and not ‘I.e.’ 😉😉😀

    Sorry a pet hate for me when these aren’t used as I understand the grammar should be. 

    But I make you right it’s more logical to spend the pension pot or gift early to your beneficiaries than let it be swallowed in  tax. 
    My current thoughts are to limit IHT…… mortgage my main home up to the hilt and gift to children to buy both a property each and cross everything I live 7 years. That way takes the most part property out of my estate (as will be mostly debt).

    what could possibly go wrong…..😑 
  • The 2nd property Stamp duty increase was a big'un. Again comes in immediately.

    Imagine that might be adding to people's costs who are moving this Friday. 
    Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.
  • Does surprise me that there were NO changes to Pensions apart from now being part of your Estate.

    Tax free lump sum untouched 
    Tax relief untouched. 
    Lifetime & Annual allowances untouched 
    There's always next year, when they will have to raise (even) more money
  • I’ve just been robbed.
    Description - straight brown hair, navy blue suit, lipstick.
    Last seen in Westminster.
    You sound nice
  • Southbank said:
    I’ve just been robbed.
    Description - straight brown hair, navy blue suit, lipstick.
    Last seen in Westminster.
    You sound nice
    Whoosh.
  • SantaClaus said:l
    The 2nd property Stamp duty increase was a big'un. Again comes in immediately.

    Imagine that might be adding to people's costs who are moving this Friday. 
    Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.
    Be very (VERY) modest anywhere round here for £250,000.
  • The 2nd property Stamp duty increase was a big'un. Again comes in immediately.

    Imagine that might be adding to people's costs who are moving this Friday. 
    Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.
    Have you found many houses in SE London for £250k  ?

    This doesn't just affect BTL properties. People buying jointly who currently own a property each & dont want to sell one (or both). I believe you can claim back the extra Stamp Duty if you sell the other property within 3 years......but maybe that has been scrapped in the small print. 
  • The 2nd property Stamp duty increase was a big'un. Again comes in immediately.

    Imagine that might be adding to people's costs who are moving this Friday. 
    Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.
    The additional amount has gone from 3-5% immediately. So that’s in addition to the standard rates of SDLT. In an already dying BTL market that will deter some investors from buying and a few tears for those about to complete.

    theres a storm brewing for renters, i think the fact there’s been no change to CGT for property will see far more exit the market than enter. Good if your a FTB but bad if a renter as I can only see rents increasing further.
  • Rob7Lee said:
    bobmunro said:
    Rob7Lee said:
    Pensions falling into IHT from 2027  :s
    Looks like we'll have to spend spend spend!

    Was always my plan anyway, so nothing changes.
    I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.

    Just spend it ffs!
    I agree, just changes my IHT planning. Will likely mean I retire earlier to give me a chance to spend it! Every cloud……

    You've got until April 2027 to make any changes to your IHT planning.
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