Inheritance tax attack on YOUR pension - Sunak Budget threat to strip nation's wealth

Asia's Tech News Daily

Many families now use pensions as a tax-efficient way to pass on wealth to loved ones free of inheritance tax (IHT). If you die before age 75, your beneficiaries may escape income tax on future pension withdrawals, too. These attractive tax breaks make a tempting target as Rishi Sunak casts around for ways to fund his Covid bailouts and plug the huge hole in the nation’s finances.

Taxpayers are dreading yet more hikes as the Chancellor plots his Autumn Budget on 27 October. Now a new threat has emerged that will terrify middle Britain.

Sunak could impose inheritance tax on our pension pots when we die, in a move that could generate a fortune for the Treasury.

Carl Emmerson, deputy director at impartial think tank the Institute for Fiscal Research, has attacked pension tax breaks as “indefensibly generous” and “very, very beneficiant”, and called for them to be reviewed.

He said it was “unfair” to allow families to use their pensions to pass on wealth free of IHT, when they are primarily designed to save for retirement.

Sean McCann, chartered financial planner at NFU Mutual, now fears Sunak could launch a pensions IHT attack.

© Getty Sunak IHT attack

McCann said: “Earlier this year, the Chancellor froze inheritance tax allowances for five years, a decision that will earn him more money as asset prices rise.

“If Mr Sunak wanted to cast his net further, he could make the bold decision to make pensions liable for inheritance tax, raising significant sums in the process.”

Under current rules, if you die before age 75, you can pass on defined contribution personal or workplace money-purchase pensions to loved ones free of income tax or inheritance tax, provided payment is made within two years of death.

Emmerson suggested the age 75 rule was too generous and Rebecca O’Connor, head of pensions & savings at Interactive Investor, said: “It could be viewed as odd giving heirs a double tax-break when a pension is meant to be for your retirement rather than tax planning.”

If you die after age 75, your beneficiaries will be liable to pay income tax when they make withdrawals from the pot.

There is no inheritance tax liability at any point, even if the total value of your estate exceeds the nil-rate IHT threshold.

This makes pensions a tremendous way to pass on family wealth in a tax-efficient way, and many peoople divert their savings into a pension as a result, O’Connor said.

“The inheritance tax saving by leaving money in your pension rather than an Isa can be substantial if your estate is over the IHT threshold.”

She said IHT benefits apply to defined contribution pension schemes, where your money is invested in the stock market and its value depends on how your investments perform.

People typically cannot pass on defined benefit “final salary” pensions on death, although some schemes make provision for spouses and dependents.

O’Connor said talk of IHT pension tax changes has “opened up a whole can of worms”. “It will cause concern for people viewing that as a major benefit of pensions,” she said.


House prices fear as mortgage rates rise – ‘winter of discontent’ [WARNING]

‘Cut State Pension age to 63 or lower!’ Too many die without a penny [REVEAL]

Holiday let owners must declare staycation profits or face charges [ANALYSIS]

© Getty Retirement plan graphic

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said charging IHT on pensions “would go down like a lead balloon with the public and go against the ethos of freedom and choice”.

She added: “Much has been made of the ability to pass on pensions free of IHT and in some cases income tax. Any change risks puling the rug out from under their plans.”

Morrissey said any change to pension death benefits would be seen as an assault on everyone’s hard-earned retirement savings, “not just those with a potential inheritance tax liability”.

Lee Clark, financial planner at wealth manager Brewin Dolphin, said Sunak must avoid doing anything that “de-incentivises people from saving into their pensions”.

“The UK has a savings crisis and as things stand it is only going to get worse,” he said.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related


3 Stock Market Newbies Analysts are Bullish On

The market has witnessed a tidal wave of new equity listings this year with companies clamoring to raise capital (and public awareness) during the economic recovery. In addition to a ... Read more »

Victory for Duchess Meghan as UK tabloid court appeal dismissed

FILE PHOTO: Britain’s Prince Harry and Meghan, Duchess of Sussex, attend Endeavour Fund Awards in London By Michael Holden LONDON (Reuters) -A British court dismissed an appeal by a tabloid ... Read more »

Tigerhall Raises $7 Million

Tigerhall, a mobile SaaS platform for social learning, raised $7 million funding led by Monk’s Hill Ventures. Pexels Tigerhall is the first of its kind, providing professionals with mobile-first upskilling ... Read more »

Five of Stephen Sondheim's best shows

Musical theatre great Stephen Sondheim died at the age of 91. Wikimedia, CC BY-SA A musical theatre legend has died. Stephen Sondheim, the greatest composer-lyricist of his generation, passed away ... Read more »

Mail on Sunday publisher loses appeal over Meghan letter to Thomas Markle

The publisher of The Mail On Sunday has lost a Court of Appeal challenge against a ruling in favour of the Duchess of Sussex over publication of a personal letter ... Read more »

Biden launching winter COVID-19 booster, testing campaign

President Joe Biden speaks in the South Court Auditorium on the White House campus, Wednesday, Dec. 1, 2021, in Washington. Biden is set to kick of more urgent campaign for ... Read more »

Cyclone Jawad: NDRF deploys 8 teams in West Bengal

© Provided by The Statesman Cyclone Jawad: NDRF deploys 8 teams in West Bengal The National Disaster Response Force (NDRF) has deployed eight teams in West Bengal in the wake ... Read more »

PICS: Ram Charan shares sun kissed pics as he poses amidst breathtaking mountains in Switzerland

© Provided by Pinkvilla Ram Charan is a name that needs no introduction to Telugu cinema fans.  Since his debut in Tollywood with Chirutha to his upcoming RRR, Ram Charan ... Read more »

For Akhilesh Yadav, 'Topi' is Important, for BJP, It's 'Roti': Anurag Thakur at News18 Chaupal

© Provided by News18 For Akhilesh Yadav, ‘Topi’ is Important, for BJP, It’s ‘Roti’: Anurag Thakur at News18 Chaupal Taking a dig at Akhilesh Yadav, information and broadcasting minister Anurag ... Read more »

Congress' leadership not divine right of an individual: Prashant Kishor's veiled dig at Rahul Gandhi

© Provided by Zee News New Delhi: Poll strategist Prashant Kishor ruffled the feathers of Congress once again after taking a veiled dig at Rahul Gandhi on Thursday (December 2).  ... Read more »

BB 15 PROMO: Rakhi Sawant, Ritesh, Rashami dance on Shilpa Shetty, Akshay Kumar's 90s song ‘Chura Ke Dil Mera

© Provided by Pinkvilla The controversial show Bigg Boss 15 has been trending on social media after Shamita Shetty and Devoleena’s fight. The makers have released a new promo in ... Read more »

Fuelled by Omicron Concern, Northeastern States Revise Covid Protocols for Inbound Travellers

© Provided by News18 Fuelled by Omicron Concern, Northeastern States Revise Covid Protocols for Inbound Travellers Even as the new omicron variant of the novel coronavirus has stoked global concern ... Read more »

Ben Affleck on how reconciliation with JLo came to be as 'great story'

© IANS Ben Affleck on how reconciliation with JLo came to be as ‘great story’.( Los Angeles, Dec 2 (IANS) Hollywood star Ben Affleck is letting fans write their own ... Read more »

Realme C11 2021 price in India hiked for second time, now starts at Rs 7,999

Realme C11 2021 has become more expensive. Realme has seemingly increased the price of its entry-level C-series phone in India without making an announcement – for the second time. The ... Read more »

Anand Deverakonda's 'Pushpaka Vimanam' set for OTT release

© IANS Pushpaka Vimanam Hyderabad, Dec 2 (IANS) ‘Pushpaka Vimanam’, starring Anand Deverakonda, will premiere on Aha OTT service from December 10. The movie stars Anand Deverakonda as a husband ... Read more »

Looking for décor inspiration? Check out Sonam Kapoor's latest find

© Provided by The Indian Express The spaces we live in define who we are. The colours, furniture and other décor elements also have an impact on our moods and ... Read more »

Bigg Boss 15: Shamita Shetty faints during a very heated argument with Devoleena

© Provided by Mid-Day The earlier episode of `Bigg Boss 15` already saw a full-on fight between Shamita Shetty and Devoleena Bhattacharjee in the `BB Game` in which non-VIPs have ... Read more »

Kabir Khan, Anand Tiwari likely to attend Vicky, Katrina`s rumoured wedding

© Provided by Mid-Day The big day is around the corner when actors Vicky Kaushal and Katrina Kaif will reportedly seal their relationship by taking the wedding vows in Rajasthan. ... Read more »

'Seismic exploration rights granted in 2014, but now law has changed'

© Provided by CapeTalk The public outcry over the seismic survey which involves airgun blasting the ocean surface is growing. Four environmental and human rights organisations have filed an urgent ... Read more »

Ashes 2021-22: 'If he doesn't fire, this could be Nathan Lyon's last series' - Laxman Sivaramakrishnan

© Provided by Hindustan Times Australia off-spinner Nathan Lyon (Action Images via Reuters) Cricket’s oldest rivalry, famously known for its on-the-field rancour, is engulfed with controversies despite a ball being ... Read more »

The 16 most hilarious and relatable memes about Spotify Wrapped

It’s officially December which means two things: Christmas and Spotify Wrapped. © Getty Images Spotify The streaming service’s hotly-anticipated feature dropped to its 381 million monthly users on Wednesday (December ... Read more »

Newly discovered dinosaur had 'blades' on tail

© Provided by Scientists in Chile spent years puzzling over the dinosaur’s ‘bizzarre’ tail A new species of dinosaur that was discovered in Chile had a tail never seen ... Read more »

WATCH LIVE: Makhura gives update on Gauteng response to COVID-19

© Gauteng Province. Gauteng Premier David Makhura visited Chris Hani Baragwanath Hospital on Saturday, 12 June 2021. JOHANNESBURG – Gauteng Premier David Makhura is giving an update on the province’s ... Read more »

Get the sewing pattern for Prima's tunic-style dress

There’s something about an easy-to-wear but stylish dress that makes us genuinely excited to get dressed in the morning – and if you can’t find the perfect fit on the ... Read more »

Minister says people should avoid ‘snogging under the mistletoe' to avoid catching Covid this Christmas

A government minister has told people to avoid “snogging under the mistletoe” to prevent spreading Covid this Christmas. © Peston/ITV Therese Coffey.png Speaking on ITV’s Peston programme, work and pensions ... Read more »

Taliban killed or forcibly ‘disappeared' over 100 ex-security personnel, says report

Taliban fighters inspect a house following a gun-battle with Islamic State fighters (AP) The Taliban have summarily killed or forcibly “disappeared” more than 100 former police and intelligence officers since ... Read more »

‘They can't silence us': the female lawyers defending Colombia's environment

Legal team faces daily threats as it works to protect displaced families from landowners, ecosystems from mining and indigenous groups from oil companies Julia Figueroa never leaves her house without ... Read more »

Don't invite more than 5 guests to your Christmas party, says minister

© Provided by Daily Mail MailOnline logo When will they make their minds up? Ministers and their muddled advice on Christmas parties Prime Minister Boris Johnson: Don’t cancel your Christmas ... Read more »

Travel news – live: France demands Covid tests from Brits as global restrictions expected to continue in 2022

LIVE – Updated at 09:27 © Getty Images/iStockphoto France is the latest country to tighten its entry requirements France is the latest country to announce it is tightening entry requirements ... Read more »

‘Defeats a good thing for All Blacks' – Damian McKenzie

© PA Images Italy v All Blacks – 2021 Autumn Nations Series New Zealand back Damian McKenzie insists that they will learn from their disappointing losses in the Autumn Nations ... Read more »

Amber Gibson: Man, 19, arrested over death of 16-year-old girl

Police investigating the death of a 16-year-old girl whose body was found in a park have arrested a 19-year-old man. © Lucinda Cameron/PA Police investigating the death of 16-year-old Amber ... Read more »

Voices: We can break the cycle of bad debt by giving children a financial education

The past few years have seen unprecedented amounts of financial pressure piled on young people. The pandemic and lockdown meant lost job opportunities, lost part-time incomes and more competition for entry-level ... Read more »

SA's relations with Nigeria on a positive trajectory - Ramaphosa

© @PresidencyZA/Twitter President Cyril Ramaphosa (left) meets with Nigerian President Muhammadu Buhari (right) during his state visit to the West African country on 1 December 2021. ABUJA – President Cyril ... Read more »

‘We'll have a Zoom party': Minister causes more Christmas confusion

Christmas party advice from the Government was plunged into chaos on Thursday when a minister said his department would not be holding a big gathering and his parliamentary team was ... Read more »

Property sellers could be slapped with eight percent extra tax - HMRC sends out letters

They claim that some sellers may have declared their Capital Gains Tax (CGT) incorrectly and will be asking them to double check their tax. Accountancy company BDO said people who ... Read more »

Leigh-Anne Pinnock shares breastfeeding photo from Boxing Day premiere as she celebrates film debut

© Getty Images Singer and actor Leigh-Anne Pinnock with her fiance, Andre Gray – Getty Images Leigh-Anne Pinnock has shared a number of photos from the premiere of her debut ... Read more »

‘Miss the sun!' Expats share the worst parts of life in ‘too expensive' London

The InterNations Expat City Ranking rated 57 cities around the globe using several major expat factors. The survey looked at quality of life, the cost of housing, how easy it ... Read more »

Scott Parker issues Aleksander Mitrovic verdict ahead of Fulham's clash with Bournemouth

© Provided by Football League World Championship – Fulham v Queens Park Rangers Bournemouth manager Scott Parker has suggested that he is not surprised to see Aleksander Mitrovic once again ... Read more »

Opinion: Championship clubs should be ready to pounce on MK Dons star come January

© Provided by Football League World Scott Twine Scott Twine managed to attract a whole host of Championship interest last January, with Bournemouth, Brentford, Luton Town, QPR and Reading named ... Read more »

F1 LIVE as Lewis Hamilton prepares ‘triple-A game' to beat Max Verstappen in Saudi Arabia

LIVE – Updated at 09:59 © POOL/AFP via Getty Images Hamilton Lewis Hamilton and Max Verstappen have battled it out all season and it all comes down to the final ... Read more »
On you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic