The incoming rule of inheritance tax (IHT) on estates worth more than £325,000 has caused concern for many, including Lou Valdini, a 71-year-old retiree from York. He has had to reconsider his retirement planning as his SIPP pot, which was intended to be passed on to his children free of IHT, may now be pushed over the threshold. Lou has decided to provide financial support to his children now via gifting, rather than after his death, to avoid IHT. If gifts are made more than seven years before death, there is no IHT charged to the recipients. Lou's decision reflects the findings of research by Saltus and Aldermore Bank, which show that many parents have provided financial support to their adult children in the past five years, with an average of more than £8,000 given from their own savings. However, Lou is also concerned about future changes to pension rules, which could impact his retirement planning. He is considering buying an annuity, a pension product that provides a fixed income throughout his later years, but worries about the uncertainty of future government actions.
The incoming rule of inheritance tax ( IHT ) on estates worth more than £325,000 has caused concern for many, including Lou Valdini, a 71-year-old retiree from York.
He has had to reconsider his retirement planning as his SIPP pot, which was intended to be passed on to his children free of IHT, may now be pushed over the threshold. Lou has decided to provide financial support to his children now via gifting, rather than after his death, to avoid IHT. If gifts are made more than seven years before death, there is no IHT charged to the recipients.
Lou's decision reflects the findings of research by Saltus and Aldermore Bank, which show that many parents have provided financial support to their adult children in the past five years, with an average of more than £8,000 given from their own savings. However, Lou is also concerned about future changes to pension rules, which could impact his retirement planning.
He is considering buying an annuity, a pension product that provides a fixed income throughout his later years, but worries about the uncertainty of future government actions
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