Drawing taxable income from pension to fund WOL policy
PippaO
Member
Hi,
Has anyone read anything meaningful (i.e. with figures to back it up) about the potential merits of drawing taxable income from a pension and using it to fund a guaranteed premium WOL policy? It was mentioned in a few places immediately after the budget but we've not seen anything tangible.
Thanks.
Comments
Second question related to this.
Can life assurance premiums for a WOL policy earmarked to pay IHT, qualify for the gifts out of normal income exemption?
I thought I'd read somewhere that this is not the case, where the life assurance policy was taken out in connection with an annuity purchase i.e. an individual buys an annuity on their own life for a lump sum and then uses the annuity payments to pay premiums on a life assurance policy for the benefit of someone else. Can't remember where I read that though...
On the first question, not read anything specifically, but have run it all through a spreadsheet and for some clients, it works rather neatly.
Referring to the second questions, yes you can use the exemption as far as I am aware.
On the annuity point, you can find details here although this apples specifically to back to back plans https://gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm20371
Thanks Tom, that's really helpful
Have running the numbers on the to do list as doing a webinar third Thursday in January on all this malarkey. Gifting will work too for some lump sum and NEOOI.
I had a read of the back to back stuff the other day - unless annuity providers with protection offerings try to reintroduce back to back plans (which they won't as they don't work) it'll be OK as long as the numbers work for you.
Go to go quiz starts in halfan hour!
Is that webinar open to all? Sounds useful.
Yes - we do a technical webinar the third thursday of every month at 10 am. It's for paraplanners or advisers or any other financial planning professionals. Registration will be open later on this afternoon.
You can sign up and view recordings and get all our techy info here https://www.mandg.com/wealth/adviser-services/tech-matters?src=301&domain=pruadviser_techinsights
Just got the registration link!
https://events.mandg.com/pensions-death-tax