2024 Autumn Budget WARNING Inheritance Tax Changes You Can't Afford to Miss

[@jdickson242]

Farming family here....very concerned about the future

[@UK-Property-Tax-Accountants]

I hope they reconsider this aspect

[@RobertGillontheinterweb]

Get advice from an IFA and tax lawyer who will allay your concerns

[@UK-Property-Tax-Accountants]

@@RobertGillontheinterweb Agreed 🙏

[@RobertGillontheinterweb]

Re: IHT on pensions. The consultation says that the pension companies will pay the IHT, however, it looks like if the residual is received by the beneficiaries after the deceased was over 75 at death, they will also be taxed on the lump sum received as income

[@UK-Property-Tax-Accountants]

Yes which could be leaving the beneficiary circa 30% of the pension. This is out and out a crime

[@RobertGillontheinterweb]

@@UK-Property-Tax-Accountants indeed, therefore pensions will likely remain a valuable tax exempt savings vehicle for contributions, however, care will now need to be taken on the withdrawal strategy as it looks like dying after age 75 if an estate is £1m+ will be very unwise. Only problem is no one knows when their number will be up! Therefore it’s likely more people will just cash in their pensions at retirement and the smart or advised people will make full use of their basic marginal rate and possibly buy an annuity at 75 with any residual pension

[@ymwan]

​​@@RobertGillontheinterwebThe income from the annuity can lift you into the 40% tax bracket or worst into the 60% (then back down to 45%) tax brackets. One would think do I do this to spite the taxman or just live with and the family gets a few more crumbs. Utterly vile, I'm not sure why many of my favorite pension channels are not up in arms!

[@RobertGillontheinterweb]

@ yes sure but unlikely given you will hopefully not be working in retirement and HRT bracket only kicks in after 50270

[@jdickson242]

Ignore agriculture! That's the worst change. Does nobody care that more farms are going to be destroyed by this?!

[@UK-Property-Tax-Accountants]

I do feel that way for you guys, for sure. It is horrible, especially for a struggling industry

[@RobertGillontheinterweb]

If you read into the agriculture changes although they are undoubtably bad they won’t affect as many farmers as you think. £1 million is an individual exemption so can be inherited and you can take the house out of the calculation. On the difference you can do what everyone else has to do and either give it to the kids early, or insure the tax bill on death

[@UK-Property-Tax-Accountants]

@@RobertGillontheinterweb A great point well made Robert :-)

[@jdickson242]

@@RobertGillontheinterweb 1 million is could be a little as 80 acres with prices around £12,000/acre. A farm needs to be around 400 acres (£4.8million just the land value) to be viable without significant diversification and additional businesses which will all get thrown into the pot. I know many farmers that own the farms outright with no partner... (Divorced or widowed) So that extra pot for a partner is unfair. They are the sole owner and are leaving it to a son or nephew that has invested a significant portion of their life working on the farm. We have looked at this on our smaller 250 acre farm and I think we will need to find £200 to £300k depending on how they value parts of the business. It's a dead end. There is no future. I have friends that had plans to invest on their farm and they now can't, why bother... Also banks are instantly concerned by the possibility of a crash in value meaning farmers won't be able to borrow. It's absolutely insane.

[@jdickson242]

@@RobertGillontheinterweb Average viable farm is around 400acres so up to £4.8 million just for the land. Many farms are owned by a single person, either never married, divorced or widowed and left the farm to their partner. It's going to impact nearly every farm. Also you can't give the estate to kids then remain on the farm. I have read that in scenarios where the father remains on the farm the taxman can ignore the transfer of the estate

[@Lynnpjjbdndji]

Its because billionaires are buying farms to avoid paying Tax .... O dear if you have 2 million in assets you pay inheritance tax. ... Who has 2 million is assets ??????????????

[@UK-Property-Tax-Accountants]

Quite a few people I would have thought 🧐

[@AngliaDecor]

Not motivating business owners to keep working hard, the future hit on pension is a poor policy.

[@UK-Property-Tax-Accountants]

Agreed 👍

[@BLOCKsignallingUK]

True. You won't work hard if you are already over the IHT threshold. Profit is now only worth 60% of what it was if you have a SIPP, and spending is now only 60% of the ticket price. If you can, retire immediately.

[@silversurfer6758]

Surely this is a retroactive tax? At least with the previous Lifetime Allowance raid there were protections put into place to mitigate damage to those immediately affected.

[@UK-Property-Tax-Accountants]

Let’s see if it does become retroactive

[@DavidBeckett-yz7tw]

Hi can you clarify just what tax is going to be taken from pensions (a draw down pension) if the house in south was worth £500k and if I had a draw down pension of £500k to pass on today there would be no IHT to pay - but does it then change in 2027 to needing to pay 40% right away? Or can I spend whatever years I have reducing the pension (some at 20%)

[@UK-Property-Tax-Accountants]

I would book a call with your financial advisor and tax advisor as soon as you can 👌

[@DavidBeckett-yz7tw]

I don’t currently have those people - if you are classed as a tax advisor can I book you - and do you know any good financial advisors or is it sticking a pin in the phone book. Regards

[@RobertGillontheinterweb]

@@DavidBeckett-yz7tw if you are single then yes the maximum nil rate bands you have for IHT extend to £500k, therefore if you died on or after 6th April 2027 then your pension pots would have IHT charged on them. If you are married then you can pass on / inherit your spouses nil rate bands and therefore if they had no assets you wouldn’t have an IHT liability

[@UK-Property-Tax-Accountants]

@@DavidBeckett-yz7tw Yes of course David: You can book a call with us here: optimiseaccountantsltd.as.me/?appointmentType=21261585

[@DavidBeckett-yz7tw]

Thanks for the information - would it be better to wait until the current government put out how the pension will be added in to IHT and what happens upon death and paying them for this. Also as well as the state pension I have a DB one which 50% will be passed to her indoors (still not married). The plan was to pass this other draw down pension which was not cheap to pay for. including AVCs which is also annoying when the current PM and chancellor have been hinting at means testing the state pension so those who either were not working often enough or unable to pay into a pension ( or preferred visiting public houses) also were able to level up. So the other question may be - would a change of government possibly reverse any of these new IHT rules?

[@JayPatel-gf9sc]

ITH 40% tax on pension. On top of that when it goes to your beneficiaries they pay tax at their higher income tax rate 20% or 40% so for every £100k your beneficiaries inherit might end up with only £20k!! (real tax up to 80%)

[@UK-Property-Tax-Accountants]

It is less than 80% but still more than 50% in tax if they are elderly when they pass (75 or older).

[@drewkavi6327]

Not quite 80%, at most it can be 64% i.e. 100% - 60% * 60%

[@cambsfarmer]

I don't think it has hit home yet with most people, this is very serious and affects everyone

[@UK-Property-Tax-Accountants]

Agreed 👍

[@neilcook1652]

UK is 6th highest GDP of top 36 wealthiest countries, and 16th highest tax levels, not saying it’s right but context is important.

[@UK-Property-Tax-Accountants]

That is a valuable share. Context is always important 🙏

[@rupertneilson5118]

To be honest inheritance tax is so disgusting iit makes me want to leave the countryand doesnt motivate me. Even if i made 200k a year id still never be able to buy back my family home without the bank owning half of it. So disgusting

[@UK-Property-Tax-Accountants]

100% agree with you 🙏

[@neilcook1652]

Wonder what future budgets will bring, Labour won’t stop there before they’re out!

[@UK-Property-Tax-Accountants]

Agreed 👍

[@rupertneilson5118]

If the duke of westminster pays some inheritance tax that might be a viable

[@UK-Property-Tax-Accountants]

Wouldn’t that be interesting 🤔👍