I never leave cash in my SIPP.......it is always fully invested. Cash hardly ever gives a positive return & I'd rather go defensive with Bonds, Absolute return funds or alternatives than be in cash. Very rarely can you time the market.......as the past 2 months have shown.
I know, this is good advice, and I found myself in that position initially because switching SIPP providers turned out to be a lamentably long and untransparent process. H-L could not re- invest in an SEC fund which was the foundation of my AJ Bell SIPP (set up by an IFA) Then again as I'm now 66, being 35% in cash in March didn't seem such a bad thing!
Great that you were in cash back then, but with worldwide markets falling south of 20% I would have thought it was a great time to be going back in. I know no-one can tell you where the bottom is, or where the markets are heading, but a discount is a discount. No need to put it all in now if you feel there is more downside, but drip feeding some in wouldn't be a bad idea. Then again I'm 13 years younger than you & have another 8-10 years before I start taking mine.
I did put some in; I set trigger index points on the way down to put more in, but I am very wary about putting in more on a monthly drip feed basis right now. If I were younger I would be more inclined to do it that way.
At 66 shouldn't you now be drawing it! Taking out your 25% cash tax free?
I can't help but think that the government needs to seriously ramp up their income over the coming years, stopping tax relief on pensions or reducing it must be on the cards. I'd be getting my money out if i were able to right now as I don't trust them not to move the goal posts.......
well actually I was wondering about this, and going to ask, but before replying, (anybody) bear in mind that unlike most on the thread, I am tax non-resident in the UK. I pay UK tax but on earnings below 20k pa, and I have not been able to actually pay into the SIPP for several years, so I am really managing it in the same way as my funds outside the SIPP, but obviously trying to dial down on the riskier stuff in my SIPP. So as I see it, I don't see the point yet in taking out a lump sum without having a specific reason. I'd just have to park it in another useless 1% cash account in a bank. But maybe I have missed some scenarios?
It was slightly tongue in cheek, as tax non-resident i've no idea what you should do! Only one piece of advice, plan how you are going to spend it. I've known far too many people (my father included) who simply wouldn't spend it.
Surely the ideal is you pop your clogs leaving 50p and a packet of Polo's, not a bucket load and some (more) to the tax man.....
Granted none of us know when we'll need it to last to, but enjoy it, you work all your life to save it.
I was thinking about this again today, and maybe there is a basic rationale to taking drawdown which applies to everyone on the thread - but do tell me if I've got this right. If I take out 25% that is tax free. But if I keep it in the SIPP, and then eventually get an annuity, I will be paying income tax on the annuity payments??
Not quite sure I understand you @PragueAddick. Why would you take out the 25% but keep it in the SIPP. ? As cash I presume ?. Not sure if that would be allowed......never heard if it before & cant see any point. Once you take any money out you effectively Crystalise the fund & a BCE takes place.
To answer your other question, yes.....you would pay tax on the annuity.
I never leave cash in my SIPP.......it is always fully invested. Cash hardly ever gives a positive return & I'd rather go defensive with Bonds, Absolute return funds or alternatives than be in cash. Very rarely can you time the market.......as the past 2 months have shown.
I know, this is good advice, and I found myself in that position initially because switching SIPP providers turned out to be a lamentably long and untransparent process. H-L could not re- invest in an SEC fund which was the foundation of my AJ Bell SIPP (set up by an IFA) Then again as I'm now 66, being 35% in cash in March didn't seem such a bad thing!
Great that you were in cash back then, but with worldwide markets falling south of 20% I would have thought it was a great time to be going back in. I know no-one can tell you where the bottom is, or where the markets are heading, but a discount is a discount. No need to put it all in now if you feel there is more downside, but drip feeding some in wouldn't be a bad idea. Then again I'm 13 years younger than you & have another 8-10 years before I start taking mine.
I did put some in; I set trigger index points on the way down to put more in, but I am very wary about putting in more on a monthly drip feed basis right now. If I were younger I would be more inclined to do it that way.
At 66 shouldn't you now be drawing it! Taking out your 25% cash tax free?
I can't help but think that the government needs to seriously ramp up their income over the coming years, stopping tax relief on pensions or reducing it must be on the cards. I'd be getting my money out if i were able to right now as I don't trust them not to move the goal posts.......
well actually I was wondering about this, and going to ask, but before replying, (anybody) bear in mind that unlike most on the thread, I am tax non-resident in the UK. I pay UK tax but on earnings below 20k pa, and I have not been able to actually pay into the SIPP for several years, so I am really managing it in the same way as my funds outside the SIPP, but obviously trying to dial down on the riskier stuff in my SIPP. So as I see it, I don't see the point yet in taking out a lump sum without having a specific reason. I'd just have to park it in another useless 1% cash account in a bank. But maybe I have missed some scenarios?
It was slightly tongue in cheek, as tax non-resident i've no idea what you should do! Only one piece of advice, plan how you are going to spend it. I've known far too many people (my father included) who simply wouldn't spend it.
Surely the ideal is you pop your clogs leaving 50p and a packet of Polo's, not a bucket load and some (more) to the tax man.....
Granted none of us know when we'll need it to last to, but enjoy it, you work all your life to save it.
Spot on. But, an opened, half-eaten packet of Polos!
We intend to massively front load spending our retirement funds while still relatively young to enjoy it. Plus financial help to our sons now, when they need it to become established, rather than on our passing by which time they will have less need for it and have to give the tax man his cut anyway. Just need to make sure I live for another 7 years!
I never leave cash in my SIPP.......it is always fully invested. Cash hardly ever gives a positive return & I'd rather go defensive with Bonds, Absolute return funds or alternatives than be in cash. Very rarely can you time the market.......as the past 2 months have shown.
I know, this is good advice, and I found myself in that position initially because switching SIPP providers turned out to be a lamentably long and untransparent process. H-L could not re- invest in an SEC fund which was the foundation of my AJ Bell SIPP (set up by an IFA) Then again as I'm now 66, being 35% in cash in March didn't seem such a bad thing!
Great that you were in cash back then, but with worldwide markets falling south of 20% I would have thought it was a great time to be going back in. I know no-one can tell you where the bottom is, or where the markets are heading, but a discount is a discount. No need to put it all in now if you feel there is more downside, but drip feeding some in wouldn't be a bad idea. Then again I'm 13 years younger than you & have another 8-10 years before I start taking mine.
I did put some in; I set trigger index points on the way down to put more in, but I am very wary about putting in more on a monthly drip feed basis right now. If I were younger I would be more inclined to do it that way.
At 66 shouldn't you now be drawing it! Taking out your 25% cash tax free?
I can't help but think that the government needs to seriously ramp up their income over the coming years, stopping tax relief on pensions or reducing it must be on the cards. I'd be getting my money out if i were able to right now as I don't trust them not to move the goal posts.......
well actually I was wondering about this, and going to ask, but before replying, (anybody) bear in mind that unlike most on the thread, I am tax non-resident in the UK. I pay UK tax but on earnings below 20k pa, and I have not been able to actually pay into the SIPP for several years, so I am really managing it in the same way as my funds outside the SIPP, but obviously trying to dial down on the riskier stuff in my SIPP. So as I see it, I don't see the point yet in taking out a lump sum without having a specific reason. I'd just have to park it in another useless 1% cash account in a bank. But maybe I have missed some scenarios?
It was slightly tongue in cheek, as tax non-resident i've no idea what you should do! Only one piece of advice, plan how you are going to spend it. I've known far too many people (my father included) who simply wouldn't spend it.
Surely the ideal is you pop your clogs leaving 50p and a packet of Polo's, not a bucket load and some (more) to the tax man.....
Granted none of us know when we'll need it to last to, but enjoy it, you work all your life to save it.
I was thinking about this again today, and maybe there is a basic rationale to taking drawdown which applies to everyone on the thread - but do tell me if I've got this right. If I take out 25% that is tax free. But if I keep it in the SIPP, and then eventually get an annuity, I will be paying income tax on the annuity payments??
Not quite sure I understand you @PragueAddick. Why would you take out the 25% but keep it in the SIPP. ? As cash I presume ?. Not sure if that would be allowed......never heard if it before & cant see any point. Once you take any money out you effectively Crystalise the fund & a BCE takes place.
To answer your other question, yes.....you would pay tax on the annuity.
I meant that maybe I should do as @Rob7Lee suggests and take my 25% drawdown allowance, rsther than keep all the SIPP as it is, and eventually convert it all to an annuity.
What´s a BCE?
Since over 25% of my SIPP is already in cash at present, presumably I can just draw from that chunk and leave the invested part?
I never leave cash in my SIPP.......it is always fully invested. Cash hardly ever gives a positive return & I'd rather go defensive with Bonds, Absolute return funds or alternatives than be in cash. Very rarely can you time the market.......as the past 2 months have shown.
I know, this is good advice, and I found myself in that position initially because switching SIPP providers turned out to be a lamentably long and untransparent process. H-L could not re- invest in an SEC fund which was the foundation of my AJ Bell SIPP (set up by an IFA) Then again as I'm now 66, being 35% in cash in March didn't seem such a bad thing!
Great that you were in cash back then, but with worldwide markets falling south of 20% I would have thought it was a great time to be going back in. I know no-one can tell you where the bottom is, or where the markets are heading, but a discount is a discount. No need to put it all in now if you feel there is more downside, but drip feeding some in wouldn't be a bad idea. Then again I'm 13 years younger than you & have another 8-10 years before I start taking mine.
I did put some in; I set trigger index points on the way down to put more in, but I am very wary about putting in more on a monthly drip feed basis right now. If I were younger I would be more inclined to do it that way.
At 66 shouldn't you now be drawing it! Taking out your 25% cash tax free?
I can't help but think that the government needs to seriously ramp up their income over the coming years, stopping tax relief on pensions or reducing it must be on the cards. I'd be getting my money out if i were able to right now as I don't trust them not to move the goal posts.......
well actually I was wondering about this, and going to ask, but before replying, (anybody) bear in mind that unlike most on the thread, I am tax non-resident in the UK. I pay UK tax but on earnings below 20k pa, and I have not been able to actually pay into the SIPP for several years, so I am really managing it in the same way as my funds outside the SIPP, but obviously trying to dial down on the riskier stuff in my SIPP. So as I see it, I don't see the point yet in taking out a lump sum without having a specific reason. I'd just have to park it in another useless 1% cash account in a bank. But maybe I have missed some scenarios?
It was slightly tongue in cheek, as tax non-resident i've no idea what you should do! Only one piece of advice, plan how you are going to spend it. I've known far too many people (my father included) who simply wouldn't spend it.
Surely the ideal is you pop your clogs leaving 50p and a packet of Polo's, not a bucket load and some (more) to the tax man.....
Granted none of us know when we'll need it to last to, but enjoy it, you work all your life to save it.
I was thinking about this again today, and maybe there is a basic rationale to taking drawdown which applies to everyone on the thread - but do tell me if I've got this right. If I take out 25% that is tax free. But if I keep it in the SIPP, and then eventually get an annuity, I will be paying income tax on the annuity payments??
Not quite sure I understand you @PragueAddick. Why would you take out the 25% but keep it in the SIPP. ? As cash I presume ?. Not sure if that would be allowed......never heard if it before & cant see any point. Once you take any money out you effectively Crystalise the fund & a BCE takes place.
To answer your other question, yes.....you would pay tax on the annuity.
I meant that maybe I should do as @Rob7Lee suggests and take my 25% drawdown allowance, rsther than keep all the SIPP as it is, and eventually convert it all to an annuity.
What´s a BCE?
Since over 25% of my SIPP is already in cash at present, presumably I can just draw from that chunk and leave the invested part?
I’m assuming that last bit is correct. When I drew my 25% they had to sell stuff to raise the cash but if you already have enough in cash then what would be the point?
I never leave cash in my SIPP.......it is always fully invested. Cash hardly ever gives a positive return & I'd rather go defensive with Bonds, Absolute return funds or alternatives than be in cash. Very rarely can you time the market.......as the past 2 months have shown.
I know, this is good advice, and I found myself in that position initially because switching SIPP providers turned out to be a lamentably long and untransparent process. H-L could not re- invest in an SEC fund which was the foundation of my AJ Bell SIPP (set up by an IFA) Then again as I'm now 66, being 35% in cash in March didn't seem such a bad thing!
Great that you were in cash back then, but with worldwide markets falling south of 20% I would have thought it was a great time to be going back in. I know no-one can tell you where the bottom is, or where the markets are heading, but a discount is a discount. No need to put it all in now if you feel there is more downside, but drip feeding some in wouldn't be a bad idea. Then again I'm 13 years younger than you & have another 8-10 years before I start taking mine.
I did put some in; I set trigger index points on the way down to put more in, but I am very wary about putting in more on a monthly drip feed basis right now. If I were younger I would be more inclined to do it that way.
At 66 shouldn't you now be drawing it! Taking out your 25% cash tax free?
I can't help but think that the government needs to seriously ramp up their income over the coming years, stopping tax relief on pensions or reducing it must be on the cards. I'd be getting my money out if i were able to right now as I don't trust them not to move the goal posts.......
well actually I was wondering about this, and going to ask, but before replying, (anybody) bear in mind that unlike most on the thread, I am tax non-resident in the UK. I pay UK tax but on earnings below 20k pa, and I have not been able to actually pay into the SIPP for several years, so I am really managing it in the same way as my funds outside the SIPP, but obviously trying to dial down on the riskier stuff in my SIPP. So as I see it, I don't see the point yet in taking out a lump sum without having a specific reason. I'd just have to park it in another useless 1% cash account in a bank. But maybe I have missed some scenarios?
It was slightly tongue in cheek, as tax non-resident i've no idea what you should do! Only one piece of advice, plan how you are going to spend it. I've known far too many people (my father included) who simply wouldn't spend it.
Surely the ideal is you pop your clogs leaving 50p and a packet of Polo's, not a bucket load and some (more) to the tax man.....
Granted none of us know when we'll need it to last to, but enjoy it, you work all your life to save it.
I was thinking about this again today, and maybe there is a basic rationale to taking drawdown which applies to everyone on the thread - but do tell me if I've got this right. If I take out 25% that is tax free. But if I keep it in the SIPP, and then eventually get an annuity, I will be paying income tax on the annuity payments??
Not quite sure I understand you @PragueAddick. Why would you take out the 25% but keep it in the SIPP. ? As cash I presume ?. Not sure if that would be allowed......never heard if it before & cant see any point. Once you take any money out you effectively Crystalise the fund & a BCE takes place.
To answer your other question, yes.....you would pay tax on the annuity.
I meant that maybe I should do as @Rob7Lee suggests and take my 25% drawdown allowance, rsther than keep all the SIPP as it is, and eventually convert it all to an annuity.
What´s a BCE?
Since over 25% of my SIPP is already in cash at present, presumably I can just draw from that chunk and leave the invested part?
BCE - Benefit Crystallisation Event, I assume.
To me, at your age the only benefit to not taking the 25% tax free lump now is if you don't need it, any further growth/profit remains tax free whilst in the SIPP. But yes if at some point you start to drawdown enough annually to exceed the tax free allowance then you'll be paying tax on it. It very much depends on your personal circumstances (amount you are likely to draw) and tax situation as always........ I'm probably less help to you as not a resident/uk tax payer.
This is part of the reason I pay little into my own pension now, trying to equal up my wife's so at least she can draw as a minimum the tax free allowance amount as soon as she hits the right age. No point me paying 40% tax and her nothing......
@bobmunro I saw my grandfather hoard his many pounds, to the extent that the IHT bill was well over half a million, that was fun as they would release probable until a deposit of the IHT due was paid and you couldn't use the deceased's money.... and don't even get me onto his refusal to ever help anyone financially, making my mum pawn her engagement ring for one when they needed cash! Being hot head back then I refused my inheritance...... guess I still got nearly half of it anyway when my mum died
Then to a lesser extent but broadly the same my parents followed suit, fortunately I managed to just keep the estate just under the IHT limit back then which of course are generous now (well currently anyway).
I've passed on what I can already (deed of variation) to my kids and will continue to do so as and when I can/is right, by the time my parents passed I didn't 'need' the inheritance, could well have done with some help 25+ years ago though when living in a bedsit in Bethnal Green!
Keep an eye on the 7 year rule, as there is a catch, it falls to the end of the estate if you die, so if the remainder exceeds the limit theres no relief for what you gave away if not completed the 7 years.
No point being the richest person in the graveyard as they say, I can't wait (and hope) to spend the lot on women (my wife and daughters of course!) fast cars (probably be electric by then) and sunnier places.
A typical care home costs about £50,000 - 60,000 per year. Not so easy to find if you're a "skier". Of course, you can rely on the state or your children to sort something out for you....
Everyone scrambling to avoid paying IHT "at all costs" seems strange when we all agree that the NHS deserves seriously more cash! I hope to leave as much as I can to the Royal Marsden to repay a debt which simply cannot be repaid with money alone. But I would prefer they didn't have to rely on my charity (which fortunately would also reduce any IHT due!).
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
Agree, it is not a commonly found tax in other European countrieś with decent healthcare systems, and most rich people avoid it anyway. Too many people get caught in the net simply because they live in or around London and their property value increased massively in the last 20 years.
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
And there's your problem. Everybody wants a great NHS, reliable public transport & safer streets......but don't want to pay for it.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
And there's your problem. Everybody wants a great NHS, reliable public transport & safer streets......but don't want to pay for it.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
Give over, my Mum‘s Liliputian terrace house in SE9 was valued at £420k, just up the hill nearer the parks there are million pounders.
Rethink how property is taxed and do away with IHT.
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
And there's your problem. Everybody wants a great NHS, reliable public transport & safer streets......but don't want to pay for it.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
Give over, my Mum‘s Liliputian terrace house in SE9 was valued at £420k, just up the hill nearer the parks there are million pounders.
Rethink how property is taxed and do away with IHT.
People already pay stamp duty when they buy them........and quite big amounts on the values you are talking about.
I cant see what's wrong with beneficiaries paying £200k on an Estate of £1.5m. They will still have £1.3m left over......or don't you think that's enough...?
In any case, if you are so worried about a small amount of IHT then you could always do something about it before you die. Give some away or put it in Trust, or last resort take out an insurance policy that pays the fecking IHT liability on your death.
Funny how very few people want to do any of these 3 things. I've been advising clients for almost 30 years & hardly any of them ever want to do anything about it. Believe me I ask !!!
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
And there's your problem. Everybody wants a great NHS, reliable public transport & safer streets......but don't want to pay for it.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
Give over, my Mum‘s Liliputian terrace house in SE9 was valued at £420k, just up the hill nearer the parks there are million pounders.
Rethink how property is taxed and do away with IHT.
People already pay stamp duty when they buy them........and quite big amounts on the values you are talking about.
I cant see what's wrong with beneficiaries paying £200k on an Estate of £1.5m. They will still have £1.3m left over......or don't you think that's enough...?
In any case, if you are so worried about a small amount of IHT then you could always do something about it before you die. Give some away or put it in Trust, or last resort take out an insurance policy that pays the fecking IHT liability on your death.
Funny how very few people want to do any of these 3 things. I've been advising clients for almost 30 years & hardly any of them ever want to do anything about it. Believe me I ask !!!
I agree it's easy to do something about it, and I would say long before you die rather than before you die. That I will do, by continuing to hand it over to my sons now rather than when I die.
The vast majority of investments, property and valuables that make up an estate were bought or financed from net earnings - i.e. it has already been taxed. Why another tax? Tax on tax on tax!
If everybody paid what was rightfully due on income there would not be an issue in public service funding.
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
And there's your problem. Everybody wants a great NHS, reliable public transport & safer streets......but don't want to pay for it.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
Give over, my Mum‘s Liliputian terrace house in SE9 was valued at £420k, just up the hill nearer the parks there are million pounders.
Tell me about it.
Parents sold their house in Glenesk Road, right opposite the park, for £78k back in 1980.
The NHS shouldn’t be funded via inheritance tax !!
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
And there's your problem. Everybody wants a great NHS, reliable public transport & safer streets......but don't want to pay for it.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
Give over, my Mum‘s Liliputian terrace house in SE9 was valued at £420k, just up the hill nearer the parks there are million pounders.
Tell me about it.
Parents sold their house in Glenesk Road, right opposite the park, for £78k back in 1980.
Went on the market recently for £1.4m.
One of my dads biggest regrets not buying my nan’s place on Glenlea Road when he had the chance.
IHT is a very draconian tax, and as someone above points out, the really rich avoid it anyway.
For once I disagree with @golfaddick - I don't see why, just because someone has sadly died, a tax should become payable on what they had. IHT doesn't actually net huge sums to the exchequer, probably less than the equivalent to a quarter of a penny on income tax.
The IHT allowance has only recently gone up to the level you refer to, it wasn't so long ago it was £300k and no carry over.
I think it should be up to the individual what they do with their already taxed money, whether alive or when they die.
It's relatively easy with forward planning to make sure you don't pay it, surprised more people don't manage their affairs to do so. But as i've experienced, in particular with my parents, they had this fear of running out of money. My dad was concerned about care home costs (he knew he'd likely end up in one as at that point had early stage dementia) yet with his pensions and savings had enough to last him until he was about 130.
Does anyone know if a property in Republic of Ireland fall into IHT in the UK?
UK taxation for UK domiciled individuals, whether income, IHT or anything else is based on worldwide earnings/interests. Therefore if you are a UK domiciled individual then overseas property would fall into UK IHT. There is also a danger of double taxation - IHT in the country the property is located and IHT in the UK. However there is a double-tax treaty with the RoI so any IHT paid there will be offset against the UK IHT bill.
All of the above are the words of a non-expert! Seeking independent legal advice is the way to go.
As I said, its not that hard to avoid IHT. I find, as @Rob7Lee stated, that many people fear not having enough money to fund long term care or fear living too long and running out of money. In my experience neither generally happens.
As I said, its not that hard to avoid IHT. I find, as @Rob7Lee stated, that many people fear not having enough money to fund long term care or fear living too long and running out of money. In my experience neither generally happens.
Or you unload it to your kids and that c*** you never really liked divorces him/her and strolls off with half of it
Inheritance Tax is less of a problem these days than the weasel exploitation of the sick and vulnerable aka social care. No exemptions there unless you are very astute and far sighted. Home and Savings confiscated by the State. Soup de Jour. And for a bonus you pay for the privilege of the Government introducing COVID -19 into your Care Home too!
I'm thinking of switching my UK mid cap funds soon into less volatile groups. Any views? Half of me is thinking to wait and see for another short period of time as the relaxing of lockdown and retail may see them rise?
Comments
To answer your other question, yes.....you would pay tax on the annuity.
What´s a BCE?
Since over 25% of my SIPP is already in cash at present, presumably I can just draw from that chunk and leave the invested part?
To me, at your age
This is part of the reason I pay little into my own pension now, trying to equal up my wife's so at least she can draw as a minimum the tax free allowance amount as soon as she hits the right age. No point me paying 40% tax and her nothing......
@bobmunro I saw my grandfather hoard his many pounds, to the extent that the IHT bill was well over half a million, that was fun as they would release probable until a deposit of the IHT due was paid and you couldn't use the deceased's money.... and don't even get me onto his refusal to ever help anyone financially, making my mum pawn her engagement ring for one when they needed cash! Being hot head back then I refused my inheritance...... guess I still got nearly half of it anyway when my mum died
Then to a lesser extent but broadly the same my parents followed suit, fortunately I managed to just keep the estate just under the IHT limit back then which of course are generous now (well currently anyway).
I've passed on what I can already (deed of variation) to my kids and will continue to do so as and when I can/is right, by the time my parents passed I didn't 'need' the inheritance, could well have done with some help 25+ years ago though when living in a bedsit in Bethnal Green!
Keep an eye on the 7 year rule, as there is a catch, it falls to the end of the estate if you die, so if the remainder exceeds the limit theres no relief for what you gave away if not completed the 7 years.
No point being the richest person in the graveyard as they say, I can't wait (and hope) to spend the lot on women (my wife and daughters of course!) fast cars (probably be electric by then) and sunnier places.
A typical care home costs about £50,000 - 60,000 per year. Not so easy to find if you're a "skier". Of course, you can rely on the state or your children to sort something out for you....
Everyone scrambling to avoid paying IHT "at all costs" seems strange when we all agree that the NHS deserves seriously more cash! I hope to leave as much as I can to the Royal Marsden to repay a debt which simply cannot be repaid with money alone. But I would prefer they didn't have to rely on my charity (which fortunately would also reduce any IHT due!).
There is nothing wrong in wanting your family to benefit as much as possible from money you have carefully saved through your life.
Inheritance tax generally only kicks in above £500k......£1m if you are married. Adding into the fact that most pension funds are outside a person's Estate then you have to be leaving a sizable sum for any of it to be taxed.
Rethink how property is taxed and do away with IHT.
I cant see what's wrong with beneficiaries paying £200k on an Estate of £1.5m. They will still have £1.3m left over......or don't you think that's enough...?
In any case, if you are so worried about a small amount of IHT then you could always do something about it before you die. Give some away or put it in Trust, or last resort take out an insurance policy that pays the fecking IHT liability on your death.
Funny how very few people want to do any of these 3 things. I've been advising clients for almost 30 years & hardly any of them ever want to do anything about it. Believe me I ask !!!
Parents sold their house in Glenesk Road, right opposite the park, for £78k back in 1980.
Went on the market recently for £1.4m.
For once I disagree with @golfaddick - I don't see why, just because someone has sadly died, a tax should become payable on what they had. IHT doesn't actually net huge sums to the exchequer, probably less than the equivalent to a quarter of a penny on income tax.
The IHT allowance has only recently gone up to the level you refer to, it wasn't so long ago it was £300k and no carry over.
I think it should be up to the individual what they do with their already taxed money, whether alive or when they die.
It's relatively easy with forward planning to make sure you don't pay it, surprised more people don't manage their affairs to do so. But as i've experienced, in particular with my parents, they had this fear of running out of money. My dad was concerned about care home costs (he knew he'd likely end up in one as at that point had early stage dementia) yet with his pensions and savings had enough to last him until he was about 130.
EDIT, to clarify are they domiciled abroad.