How The Budget Destroyed Inheritance Tax Planning

[@carlrobertsonmoney]

My substack: moneymatters1.substack.com/

[@kaylaing-m7h]

Thank you Carl for this briliant video! Will share it with friends and family.

[@scottprior4451]

Very informative as very clearly communicated thanks

[@Leethepensionsguy]

Hi Carl, I think this is an excellent video explaining the recent changes. Clear and concise with some great examples to illustrate your points.

[@carlrobertsonmoney]

Thanks for the feedback Lee.

[@DismalScience]

Hi Carl, thanks for the informative video. Many advisors mention 'family investment companies' as a means of reducing IHT on a larger estate, but there is very little online information about them and how they operate. If you could outline the basics in a future video, that would be great.

[@carlrobertsonmoney]

Thanks for the feedback. I will look into this for you.

[@Sackbutsam]

Thanks Carl. Great video

[@carlrobertsonmoney]

Thanks for the feedback much appreciated!

[@timbrassey9146]

It seems to me that buying an Annuity to cover baseline living costs is one way to avoid some IHT and get in effect greater than 4% drawdown on the same size pot. A video on effective use of annuities would be great!

[@carlrobertsonmoney]

Good idea!

[@kirkster501]

@@carlrobertsonmoneyI agree. Annuities looking for attractive again.

[@Hilary_ClarbySoaps]

Through an unfortunate state of circumstances I am now trying to learn about inheritance tax. I previously thought it would never apply to me as we have a normal income, I foolishly thought inheritance tax only applied to the wealthy. Not so! I’m currently very angry that the government stand to gain 40% of the profit my brother made through working hard and paying his way through his whole life. I’m even more annoyed we have to pay any IHT before we can sell his property, which means we will have to get a loan to do this and pay interest on that…pushing up the deductions to about 47%. I’m now seeking advice to ensure my children don’t have to face this problem in the future. It would be interesting to see the stats of how many people now pay IHT in relation to their income. I bet the super rich have already found ways to avoid it. Disappointed with a labour government elected to serve the working people.

[@Leapops]

Also relevant for those with large pension pots is where to hold your risk assets. For example if you have a large cash holding is this cash better placed in your isa or in your sipp? My initial thought is to hold it in the Isa and then swap if equities fall significantly. If equities crash then this reduces the swollen pension pot and if they rise then you are going to be so well off you won’t care too much about a bit of IHT when you pass.

[@nokchilton1562]

Good content. And please touch up how to setup trust to protect the rental property for my children. Thank you

[@carlrobertsonmoney]

Thanks for the feedback. I will work on this.

[@benkellyshow]

Great video - if someone had a trust setup with beneficial ownership 90/10 in favour of the donor, could that be changed to 90/10 in favour of the beneficiary to protect from IHT ? Or would the donor then still need to survive 7 years (even tho it’s beneficial ownership within the trust)

[@carlrobertsonmoney]

Thanks for the feedback. Depends what kind of trust we are talking about. If a bare trust then changing the allocation would be like gifting. If a discretionary trust not an issue as trustees can decide how to split the funds and there is no set percentages.

[@benkellyshow]

@@carlrobertsonmoneyawesome thanks

[@paul19vf21]

Thank you. Might we get into a position where somebody who is due to inherit may be better off taking a lower paid job (moving into 20% income tax bracket) or perversely not working for a few years? Thanks

[@carlrobertsonmoney]

Interesting idea. Potentially, if it works for that person. Would need to factor in other benefits given up like employer pension contributions and being able to get a job in the future. Another option could be to carry on working but put majority of salary into your own pension and live off the inherited pension withdrawals.

[@lajollapowell4068]

Is there an option to move your pension abroad?

[@ianwall9152]

Is there a typo at 5.08 - shouldn't it be £100k not £200 ie 20% of 500k

[@GregoryFarrell-g1r]

Could you please say on Pensions, if you have a final salary pension ie no actual ‘pot’ but your spouse has a 50% entitlement upon death ie on death the pension value reduces by 50% how does this work out in pension value terms & who sets the value - for example a company pensioner of 25 years - is it the original value or the value after 25 years of pension having been taken out? Thanks.

[@scotdoc]

You missed one further way to deal with this. Use a Monte Carlo simulator +/- software like Voyant Go to draw portfolio down in a sensible, progressive way. Means diminishing cut for the IFA but I'm sure you're all very busy currently!

[@renjithjoseph1755]

Hi Carl, can I take an annuity @ age 55 and take income from drawdown and covert the money left in the drawdown into an annuity @ age 75. Thanks

[@carlrobertsonmoney]

Yes you can convert a drawdown pension to an annuity at a later date e.g. 75

[@renjithjoseph1755]

Thanks

[@skwoogy6457]

Not to worry . With a bit of luck a future Government will roll back these changes

[@davidsandrovitch7635]

By the time a future government reverses anything, and there's no guarantee they will, many people will may have made substantial changes to their pension and assets. If they haven't they will have lost several years of planning time.

[@carlrobertsonmoney]

Fingers crossed.

[@ianwall9152]

Highly unlikely although I hope I am wrong

[@pipobscure]

😂 there’s a bridge I wanted to sell you 😀

[@garycarder2694]

I would highly doubt it.

[@andyasia]

AIM stocks @ 50% relief on a 40% charge on £500k is £100k, not £200k as per your video at 5:11 as 20% of £500k = £100k.

[@caparn100]

What happens to your pension pot if you die before your spouse? Can your spouse access the money without paying any tax on it?

[@davekirby8720]

You should name your spouse as a beneficiary. You can easily do this through your online account with your pension provider. The pension element of your estate shall be free from IHT if you die before Apr27. Hopefully, future advice from this channel shall advise how best to reduce IHT if you die after Mar26.

[@Annie-yv7rc]

Only the poor pay taxes the rich have trusts or off shore accounts. Why can’t people who just get caught with the IT threshold tax threshold because it hasn’t changed for so long. So anybody wanting to leave their family ( not necessarily your children) are hit. We need to give young people a start with no safety net for them if ill or fall on hard times

[@philiprider5981]

The 91 k inheritance tax liability isnt correct as it doesnt take in the 175 k nik rate band 3:36

[@albedo0point39]

In your experience, do most pension plans allow beneficiaries to draw down inherited assets rather than forcing the taking of a lump sum? What about where a beneficiary is a child? It strikes me that forcing lump sum payment could easily compound the problems of the IHT adjusted pension inheritance, by pushing (possibly in employment) beneficiaries to realise it at higher or additional tax rates. At least if a delayed drawdown was possible, some planning to take at basic rate would be preferable.

[@carlrobertsonmoney]

The Morden day SIPPs should do but the older style workplace pension schemes are less likely to. You usually have the option to move it though once inherited.

[@caparn100]

Farmers simply need to place it in a trust or transfer it to the intended beneficiaries at least seven years prior to their passing.

[@SouthernMonkey1000]

Now feels like that last 40 years of graft have been to just top up the governments coffers

[@Hemswell]

Indeed. To keep paying the salaries and pensions of a life sucking public sector and big government. There is zero incentive to work hard and prosper in the UK anymore.

[@benkellyshow]

Yes agree - this may cause higher unemployment as people will prefer to retire early (or now) and spend everything in their pension pot during their lifetime rather than pay 40% to the wasteful government

[@ianhicks1963]

So if you have a decent pension pot, say over £1M start moving the money into an equity ISA for spouse and children. You probably end up paying tax at 40%, but at least the money is only taxed once.

[@MrTpain1945]

And you wonder why Gold prices are rising

[@glostergloster6945]

Your initial example of a family home is not correct as you seem to have left out primary residence relief, which when added to the nil rate band means that the theoretical family home would pay 21k of IHT, not 91k. And thats assuming there is no spouse, if there is a spouse or civil partner then there would be no IHT to pay at all up to 1m.

[@TaiwoOmotosho-m9v]

How did he get 91K and how did you get 21K ,pls?

[@glostergloster6945]

@TaiwoOmotosho-m9v The standard nil rate band is 325k but there is also an additional 175k allowance if you own your own home. Its the difference between including or excluding that additional allowance

[@benkellyshow]

@@glostergloster6945the RNRB falls away on net estates over 2m

[@leobrown6875]

I will take out my 268k and save it outside the uk .then I will spend spend spend until it runs out .then I will down size and spend again. Then I will die and leave the 268k to my daughter

[@kirkster501]

My thoughts exactly.

[@johnbrotchie4465]

It doesn’t matter where you hold assets. IHT is on worldwide assets if you’re a UK tax resident.

[@lajollapowell4068]

More and more likely to retire aboard

[@pataleno]

I'll be retiring earlier paying as least tax as possible and spending my IHT and gifting. Many high skills workers like me will leave the workforce. I'm not sure this government have thought this IHT grab out properly.

[@andyasia]

You start by talking about businesses and AIM shares but then you only elaborate on AIM shores and you never mention businesses again.

[@davidmontague9125]

Your videos fail to reflect the generally accepted view that we need a rebalancing of taxation from income to wealth. As with any such exercise there will be losers and some winners. Would you prefer an army of wealth assessors roaming the land?