@@cuddles4068 It may not be possible in the same way as described in this video, because I would imagine that civil service pension is a defined benefit scheme and will pay a prescribed amount of income. That is different to the defined contribution type arrangements described in the video.

@chrisbourne-retirementplanner thank you. I think I'm going to need to see a financial advisor but I'm glad I watched your post, I wasn't aware of the options you spoke about at all.

@@Newmusicreview In terms of paying IHT? Well, many decide IHT avoidance is not really a priority. The same principles apply though if you still want to try and avoid the tax - the gifts out of income exemption isn’t restricted to only giving gifts to children.

Spend down and draw down The new words we will be using a lot more

My pleasure. Thanks for watching.

Well they’ll probably have their own IHT concerns some day, but it’s still preferable that you avoid the tax. It would certainly be preferable to the kids themselves.

No worries thanks for watching

You would probably pay less income tax on the withdrawals, yes.

Probably not if the underlying asset is an investment bond as withdrawals will usually be classed as return of capital.

There’s no more effective plan than spending money. It’s actually more difficult than it sounds though for a lot of people. You’ve got to spend it on things that don’t themselves hold any residual value (no point spending on nice watches and cars for example), and there’s only so much consumption one person can achieve. Apart from travelling in luxury more, which many people tend to tire of as they get older, it can be quite hard to get rid of cash!

No it can be anyone as long as you’re making the payments out of surplus income.

It’s absolutely bonkers

Yes dividends are income. If it is surplus to requirements you can state that you will be giving your regular dividend income away. Because the amount of that will naturally fluctuate, you don’t need to name a specific £ amount - as long as the method for making the gift is defined, it should meet the criteria.

Yes SSAS assets will form part of IHT calculation from April 2027 too.

Thank you! Thanks for supporting it.

Yeah saw this train coming now in Portugal for 2 years ..

It’s all to do with how someone’s estate value can affect their Residence Nil Rate Band… If someone’s estate for IHT purposes exceeds £2m, the RNRB starts to be reduced. It is reduced by £1 for every £2 over £2m. So someone with an estate of £2.35m will have no RNRB. So let’s say someone has a pension pot of £350,000 and other assets of £2m, they could find their effective IHT rate is 60% due to the loss of the RNRB. When the beneficiary takes the money out of the pension though, there is income tax for them to pay. An additional rate income taxpayer in England, Wales or Northern Ireland would pay 45%, and a Scottish resident would pay up to 48%. The result is that a Scottish beneficiary might only receive £29,906 additional cash from the £350,000 pension pot, which is an effective tax rate of 91.46%. An English, Welsh or Northern Irish beneficiary might only receive £36,787, which is an 89.49% overall tax rate.

@ that’s shocking

Haha spread the word 😉

I don’t blame you! Thanks for watching.

Thank you. Yes there are so many other routes they could have gone, but we’re stuck with what we’ve got for now. As you say, people will find ways of avoiding paying the highest rates so it seems counterproductive.

Yes, that is quite typical. These changes certainly won’t help matters.

My parents have 1 and don’t understand it. Setup 16years ago and don’t understand it then or now. Too scared to ask or do anything about it.

HNY Graham. Glad you enjoyed the video 👍🏼

Thank you. I think it’s fairly certain that they haven’t thought it through!

Yes we're retiring around age 58 and will make some large lump sum gifts early on and then later on gifts out of excess income making sure we remain under the IHT threshold.

@@palmtree-e2l same. I’m 56 and looking to retire as soon as possible now. My job currently is very easy high paid home based so I’m just sitting it out for now. I currently pay about 2K a month income tax and NI on top and that will stop. Government have given me no incentive to work any more. I have a place in Spain and will be spending a lot more time there as well.

Equally advantageous for IHT mitigation

Thank you! Yes, civil partnership would offer the same advantages.

I think if you keep records to show you each cover 50% of expenses, you can gift your own excess income. Good record keeping is key though.

Thank you. I will probably do a separate video, but I have got older videos covering bonds; kzbin.info/www/bejne/bmLSqKR_ftJ6jtEsi=86p2AN4Wptq_7p1T and trusts; kzbin.info/www/bejne/Z2GziIapqNGEnJYsi=oNHKhRitNwT5RDH3. I hope these help.

Me too. thanks

Me too thanks