Under current rules if you die and want to leave the remaining value of your pension to your spouse or your estate, the fund will suffer tax at 55%. Under the new rules from the 6th of April, if you die before age 75, you can leave the pension fund to anyone you nominate and they will receive it free of tax – and if it involves an income, that income will be free of tax! Under the new rules, if you died aged 75 or older, then the person receiving the pension fund or pension benefit would have to pay tax on it based only on the level of their income tax – up to a maximum of 45%.
This gives a genuine incentive to save, as you will be able to pass the pension savings on in a very tax efficient way.
Recommendation: Ensure you complete a Nomination of Beneficiary form and lodge it with your pension provider, and review it regularly in case your wishes change as regards to whom you want to give it.
DO CON TACT US IF YOU NEED ASSISTANCE IN UNRAVELING THESE NEW PENSION RULES. FURTHER RULES CAN MAKE IT SEEM EVEN MORE OF A MYSTERY BUT THE RE WILL BE SENSIBLE TAX -EFFICIENT WAYS TO TAKE ADVANTAGE OF THESE NEW RULES .
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