Tories to slash pensions 'death tax'
The tax charged on pensions passed onto loved ones after death is to be slashed.
George Osborne will today (Monday) confirm a sharp reduction in the so-called pensions 'death tax', the rate applied to pension pots which are passed on to loved ones after death.
At the moment if you die and your pension passes on to your loved ones, the money is subject to a whopping 55% tax rate.
This will now change from April 2015. If the person who dies is 75 or over, then the inheritors will pay their usual rate of income tax when they withdraw the money. Should the deceased be under 75, no tax will be charged at all.
This tax change will cost the Government an estimated £150 million a year.
The move is just the latest in a series of pension revamps announced by the Government this year. It has already handed pensioners more freedom to use their pension pots as they please, removing the need to purchase an annuity.
It should also improve the mood at the Conservative Party Conference, which has got off to an awful start with the defection of Mark Reckless MP to UKIP, while Brooks Newmark, the minister for civil society, has been forced to resign due to tabloid revelations about his private life.
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Simple question, simple answer. Does the government finance the country? No! Do the people finance the country? Yes! Did the people bail out the bankers who now rob them blind? Yes! So where the hell does the statement , it will cost the government £150 M come from? The day any member of parliament in any government does anything for the people , is the day they leave office! These are the people who suck the life blood out of this country and languish it on others around the world by way of international aid. Yet here at home there are pensioners on the streets and starving! Its about time taxation was abolished in its entirety for atleast 20 years. Given the tax a person pays in their life , multiplied by the population the coffers are overflowing! We could each receive a tax refund of £1000,000 and life a comfortable life and it wouldn't break the bank, provided it was only given to those who can prove ancestral residence of what was once an island named England. If our forefathers fought for it then we deserve it, if not then we don't, simples! :-)
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To benefit from this your pension pot has to be "not vested". So you need first to have a DC pension and not to have bought any annuity with it. Currently this will apply to very few people, but given the pension liberalisations already made, might well be a much larger number in the future. Effectively it by passes inheritance tax rules - the devil is in the detail but I suspect the pool of those that can inherit this way will be rather limited.
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This reminds me of my current situation with my family in Salisbury. I've started proceedings with pretty much all the paper work after my Dad recently died, but then various depts take a while to reply. Then because i'm back at work and can't be in two places at once. I had a feeling the 'Just tell us once' service would only do governmental services. I've managed to sort things like council tax, household bills etc. But it seems to be the MOD pension, state pension entitlements, bus pass etc. It will all come together in the end, I just can't be in two places at once.
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29 September 2014