Скачать или смотреть Pensions are becoming subject to inheritance tax (IHT) from 2027. Is gifting the answer?

With pensions becoming subject to inheritance tax (IHT) from 2027, planning is more important than ever. Let’s look at the main considerations and how gifting might offer a solution...

🌳 What’s Changing?
Pensions have been a tax-efficient way to pass wealth to the next generation. They’ve been sheltered from inheritance tax, providing families with financial security. The new rules coming into effect in 2027 mean pensions will no longer enjoy this protection.

🌳 Why Planning is Crucial
The rules won’t change immediately and so I would urge caution against knee jerk reactions. Acting sooner allows you to explore options.

🌳 Is Gifting the Answer?
One way to mitigate inheritance tax is by gifting assets during your lifetime. By doing so, you can reduce the value of your estate, potentially avoiding hefty tax bills for your beneficiaries. Gifts made more than 7 years before your passing typically fall outside of your estate for IHT purposes.
Gifting can also allow family to benefit from financial support - for example, getting on the property ladder, buying a new car, etc. It’s essential to plan carefully to ensure you don’t leave yourself financially vulnerable (i.e. for your retirement & potential care/home fees).
Gifts out of your surplus income are considered exempt from inheritance tax. As long as there is surplus income, and it is a regular payment, you can make gifts benefiting your children/grandchildren. Pension contributions, school fees, paying for clubs and hobbies, even help with living costs.

🌳 Tax-Efficient Investments
There are investment portfolios that can benefit from inheritance tax relief, and combining investment strategies with gifting could provide a solution to preserving your legacy.

☎️ By seeking advice, you can create a strategy for your unique circumstances, goals, and the upcoming changes. If you’d like to discuss your estate planning options, get in touch today.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
The Financial Conduct Authority does not regulate Estate Planning.

www.willowtree-fs.co.uk

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