Generation Planning
Generation Planning with your pension fund saves Inheritance Tax
Inheritance tax at 40% is being paid by more and more families as property values rise so an opportunity to reduce the tax is very welcome.
If you have other savings and do not need to use up all your private pension pot during your retirement there is now scope to leave the fund to family members, down the generations, free of Inheritance tax.
For example:
You may wish your widow/er to be able to draw the income she/he needs, passing on the remaining fund to your children and maybe grandchildren for educational expenses etc.
This is now possible by completing a suitable beneficiary nomination to allow them to take income only according to their needs.
The rules before last year used to be that amounts left to anyone other than a ‘dependent’ fund suffered a tax charge of 55%. The position now depends on the age of the pension member on death. On death before 75 income paid to the nominee is tax free of income tax, on death on or after75 it is taxed at the recipients own tax rates.
If you would like to discuss the above in relation to your position please contact us on 01727852299 or at help@kdw.co.uk.