benjaminfabi
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To give HMRC its due, the annuity probate calculator does state: This calculator will estimate the open market value of the guaranteed annuity payments which are to be paid to the estate in straightforward cases. HMRC considers that the values p…
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Hi, From what I understand... A joint life annuity has no IHT value on first death (assuming in good health when established). Value protected annuity the protected value on death is the amount in the estate. Guaranteed period annuity the p…
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Thanks, and noted on terminology! I'd used them synonymously but I suppose there is a technical difference. In theory, however, HMRC still assume someone is not in poor health if they survive two years from the annuity purchase, even if they've r…
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Okay thanks. So let's consider this scenario: * Annuity purchased for £200k, providing £12,000 level income(monthly in arrears) with a 20 yr guaranteed period. * Annuitant dies 35 days later. * HMRC probate valuation calculator assuming death…
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I always ask for submitted tax returns and pension contribution histories when I do taper calculations. Clients frequently don't know what of the income is taxable (gross rent vs taxable rental profit being a common example), and in this case the sh…
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@Wildparaplanner thanks for following up this is very useful!
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I think both your scenarios are right but there's a step between them that deleted the first one on 6/4/2024. i.e. today you're left with an LSA of £0. And, as I have commonly seen - a hard query with someone about why a small crystallisation was…
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Hi, Any pre-2006 pensions in payment, including capped DD, were tested at the first BCE that took place after A-Day. That uncrystallised fund that got tested at age 75 (2019) will have triggered a BCE on the drawdown fund under the rules in fo…
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The client will get tax relief on the contribution whether he has carry forward or not. Having carry forward to cover the excess £5k will stop the annual allowance tax charge applying later in the tax calculation to claw it back. So yes, the clie…
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No worries. This topic is always difficult because it's hard to bring everything down to the two simple transactions: * Has money come out of a pension as PCLS. * Has money gone into a pension as a contribution. Nothing else around why the…
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That's irrelevant. The test is related to whether tax free cash has been taken from my pension and whether pension contributions have been made to my pension. And then, whether the contribution/s are allowable based on the recycling tests. Con…
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In which case if you recommend this strategy and the quantitative tests are met, it's going to be pcls recycling. Unless you take from Mr now and fund Mrs from the company, or vice versa. You can only recycle into a pension you are the member o…
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> @Wildparaplanner said: > Perhaps a phased approach (e.g. Phased Flexi-Access Drawdown) to meet their monthly outgoings would be less grey? That way, you have a direct link to spending, and presuming an income source will reappear once the …
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I'm confused. Isn't the current cashflow issue solved by pcls from existing pensions?
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@GolfPutt21 they have money in the existing pension now, which a pcls solves personal cashflow. They will have money in the company when the property is sold. They can take that money out of the company other than via a pension eg as a dividen…
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Without knowing anything other than what you've disclosed I would say that, based on the figures you're talking about, all the quantitative tests will show this is recycling. The remaining test is whether it was 'pre-planned'. It seems to be that…
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@Radnor I agree with this. Contributions can be added by anyone with the account number, but they can't open the account or control it. @GolfPutt21 There are a few very good reasons to stick with a GIA, including: * Contributions from grandp…
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Yeah thanks, that was my track, and that any additions he makes to the collection will be regular spending if it becomes a pattern.
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Basis of discretionary management agreement [DIM] will manage your investments on a discretionary managed basis. This means that your portfolio will be managed without the need to advise you every time an underlying change is made. The benefits a…
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Hi Not sure what you'd define as 'proper' reporting, but in my experience platforms aren't built for the information needs of corporate investors. When investing for corporates we try to use single asset funds, using income units. Keeps it cle…
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@GolfPutt21 It isn't a simple question and confusion is understandable. Employer pension contributions aren't limited - full stop. But to obtain corporation tax relief they must pass the 'wholly and exclusively...' test @PippaO mentioned. So a…
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@Jimbo no, it's not you in the cul-de-sac, it's the client. In this case, on the face of it at least, I think they are caught fully in the sights of the changes and they're not going to get away from the future liability to IHT on the pension fun…
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Hi, My advice is get professional advice. VAT is not simple in financial services. Interpretations of the VAT charging exemptions vary considerably in my experience.
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@Wildparaplanner you don't get the transferable NRB until/unless the executors apply for it on death i.e. you aren't entitled to it until you die so you can't use it in your lifetime.
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The calculation is (proceeds + withdrawals) - (amount/s invested + previous gain/s) The withdrawals component will include the £2,800, because it has been withdrawn. You can't ignore the withdrawal in the calculation. What changes is whether t…
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@Wildparaplanner I always think of it in terms of everything being a gift (or transfer of value), with the estate being the last gift you make. So when I do the IHT calculation I set out the amounts chronologically and this will default to the full …
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I'm finding many options are weirdly neutral. eg withdraw pension funds to create income to buy an exempt WOL - you're giving HMRC the income tax now instead of the IHT later. Certainly there are a lot of good and workable options - but are any o…
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Based on what @les_cameron said initially in this thread, I assume clarity was sought and received, and now it's all back to as it was?
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Aegon have also now confirmed the same.
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There's lots we don't know about the clients here, but based on what we have I don't think there is an ideal protection option. Best fit would probably be reviewable premium WoL for the current liability. They will get regular premium/cover level re…