Help for Inheritors
George Osborne has announced that as of next April, pensioners will be able to leave more of their money in their will to their loved ones without being clobbered with a 55% tax charge.
Currently, when it comes to leaving a pension pot as part of a will, if the valuation of the lump sum exceeds the lifetime allowance, the excess is taxed at 55% and tax will be owed by the beneficiary upon inheritance. If one passes away at age 75 or older, or if the pension pot has already been touched, the entire sum will be taxed at 55%.
The conservatives plan to get rid of the 55% tax rate that inheritors currently pay on untouched defined contribution pension pots and those from which money has already been withdrawn. The changes will help approximately 320k people and it will mean that those who have worked hard to save all of their lives will be able to pass on their money to families tax free, however this is likely to cost the government £150m a year!
Get in touch with Blacktower Financial Advisers for some independent advice on your pensions and investments.