You have to change your life;330903 wrote:As in for his estate and therefore his beneficiaries on his death there is now - due to him being over 75 - an incentive to draw down his SIPP before the rest of his assets because whilst all his estate is now part of the inheritance tax at 40% above 325k his pension will 'suffer' an additional tax charge depending on the marginal tax rates of each beneficiary.
Mr GL.. afaik the additional tax charge only applies if a beneficiary spends their inheritance. They could carry on the pension and benefit from a lifetime of tax-free investment. That ought to be more important than the IHT consideration. I assume that once a legatee acquires their share of your dad's pension they are free to model their own p/f: so you would be free of that responsibility. Apologies if I have missed any obvious hitch; I should like to know if I have because my intention is still to run down the unprotected side of my folio and pass on my pensions untouched.
yes - this is a reasonable line of thought... however I also need to treat all of his beneficiaries equally and in order to do so I think I need to be blind the their individual circumstances...
For example - for the sake of discussion - assume I am so rich I will never need to draw on the pension I inherit from my dad and so can pass it on undisturbed (save for investment gains / losses) to my children but my brother is penniless and will immediately draw as much as he can because he needs the money ASAP. He will never be able to take advantage of the gross compunding available within the SIPPs tax free wrapper and so his priority is to get as much as he can at the point of receipt and is tax rapper ambivalent... whereas I would want to keep as much in the tax free wrapper as possible for the tax free / gross compounding opportunity...In this scenario there isnt a simple answer that both parties could agree on...
I believe that I and my three siblings are all in strong financial situations however - due to a broken relationship in our family our elder sister is somewhat estranged from the other two and I and is - potentially - a particularly litigious and potentially irrational to prove a point type person so I just can't ever see us reaching an agreed plan of action ahead of time and I have to assume that whatever decision I make HAS to bear independent scruitiny and be beyond reasonable criticism... so whatever decisions I make they need to be in my fathers best interest AND be reasonable / justifiable up to the point my role ceases which is at my fathers death... any decisions that may in hind site have been more beneficial to the beneficiaries dependant on their own individual circumstances I can't include in my decision making process...
hopefully I have made sense and not confused the matter for you further! or made any obvious blunders in my logic / understanding...