Analysis suggests that this could cost as many as 20,000 grieving families around £65,000, which would be an extra £40,000 on top of what they would pay under the current regime
Tens of thousands of families will be forced to pay increased inheritance tax following a decision to add Britain’s “most hated tax” to pension pots. Currently people who die before the age of 75 can hand over their unused pension pots to loved ones free of paying any inheritance tax .
Separately, personal finance experts say older people with large pension pots may now choose to make major changes to avoid the new tax, which could mean they go on a spending spree in later life to keep their wealth out of the hands of the taxman. They could also choose to give away lump sums from their pension pots before they die or they might use the cash to buy an annuity, which guarantees an income for life, rather than leaving a pot that will be heavily taxed.
Pensions industry expert Gareth Henty, of PwC, said the tax raid “will have significant implications for pensioners and their financial planning. Individuals will now be disincentivised to pass private sector pension wealth down the generations.” A bereaved individual with an income of £50,000 inheriting a typical £100,000 pension will pay an extra £40,000 in inheritance tax from 2027 plus another £25,946 in income tax due on their higher income. Figures from the Office for National Statistics show the average pension pot for a 55- to 64-year-old is £107,300, according to the Office for National Statistics .
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Russia 'fines Google $20,000,000,000,000,000, -000,000,000,000,000,000' - more than all the money in...The tech giant is facing claims from 17 Russian TV channels after banning their accounts on YouTube, which it owns, as a result of international sanctions.
Read more »
Warhammer 40K: Rogue Trader and its new expansion are on sale for 40% offTed has been thinking about PC games and bothering anyone who would listen with his thoughts on them ever since he booted up his sister's copy of Neverwinter Nights on the family computer. He is obsessed with all things CRPG and CRPG-adjacent, but has also covered esports, modding, and rare game collecting.
Read more »
GP disguises himself and injects partner of his mother with poison in inheritance rowThomas Kwan, 53, a GP, pretended to be a community nurse giving a Covid-19 booster jab to Patrick O'Hara, the partner of his estranged mother. He injected Mr O'Hara with poison, causing a rare and life-threatening flesh-eating disease. Kwan denies attempted murder, claiming he meant to inflict 'no more than mild pain and discomfort'.
Read more »
Money blog: Bank fined £29m over 'shockingly lax' checks; different ways to beat inheritance taxStarling Bank has been fined over its efforts to curb financial crime. And with the budget coming up, we look at ways to minimise inheritance tax - one of the taxes the chancellor could be planning to raise. Read this plus all today's consumer and personal finance news and tips below.
Read more »
Sinn Féin blasts £40K Halloween Council fund “being blown on pumpkins”Belfast Council to create 'monsters' around city centre in bid to attract people in
Read more »
What happened to the Menendez brothers' $14.5 million inheritanceErik and Lyle Menendez were left in control of their parents' estate after they brutally murdered Jose and Kitty Menendez in 1989 but they never got their hands on the fortune.
Read more »