Post by Fletchsmile on Aug 9, 2016 13:42:52 GMT 7
Article on using pensions to reduce UK inheritance tax.
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How to pass on pension wealth
Many people will want to leave an inheritance to family after they are gone.
Fortunately, thanks to pension freedoms, pension wealth can now be passed on more freely and tax efficiently – meaning more financial security for your loved ones.
What’s changed – and who could benefit?
Last year’s pension revolution means not only can you now take your pension savings when and how you like from age 55 (57 from 2028), but passing pension wealth down the generations has become far easier and more tax-efficient.
There is also more choice over how your beneficiaries can inherit your pension, if they are not a dependant. This means your spouse, partner, adult children, grandchildren, friends – anyone – can benefit and have the choice to keep the money sheltered from tax within a pension.
Plus, they might pay less tax on withdrawals too.
Although this is all great news, how your beneficiaries can receive this inheritance will depend on how you decide to draw an income from your pension and at what age you die – so understanding your options and planning ahead is important. Seek advice if you are not sure which option is suitable for your circumstances. Tax rules can change and benefits depend on personal circumstances.
Pensions can be inherited tax free
If you are happy with not securing a regular income and you have a pension which allows you to take an income as and when you want (e.g. a self-invested personal pension - SIPP, or drawdown pension), and you die before reaching age 75, it can normally be passed on entirely free of tax.
If you die after reaching age 75, tax will be deducted on each withdrawal your beneficiaries make at their highest marginal rate.
contd....
www.hl.co.uk/news/articles/how-to-pass-on-pension-wealth
=====================================
How to pass on pension wealth
Many people will want to leave an inheritance to family after they are gone.
Fortunately, thanks to pension freedoms, pension wealth can now be passed on more freely and tax efficiently – meaning more financial security for your loved ones.
What’s changed – and who could benefit?
Last year’s pension revolution means not only can you now take your pension savings when and how you like from age 55 (57 from 2028), but passing pension wealth down the generations has become far easier and more tax-efficient.
There is also more choice over how your beneficiaries can inherit your pension, if they are not a dependant. This means your spouse, partner, adult children, grandchildren, friends – anyone – can benefit and have the choice to keep the money sheltered from tax within a pension.
Plus, they might pay less tax on withdrawals too.
Although this is all great news, how your beneficiaries can receive this inheritance will depend on how you decide to draw an income from your pension and at what age you die – so understanding your options and planning ahead is important. Seek advice if you are not sure which option is suitable for your circumstances. Tax rules can change and benefits depend on personal circumstances.
Pensions can be inherited tax free
If you are happy with not securing a regular income and you have a pension which allows you to take an income as and when you want (e.g. a self-invested personal pension - SIPP, or drawdown pension), and you die before reaching age 75, it can normally be passed on entirely free of tax.
If you die after reaching age 75, tax will be deducted on each withdrawal your beneficiaries make at their highest marginal rate.
contd....
www.hl.co.uk/news/articles/how-to-pass-on-pension-wealth
