With just a few weeks to go, we're not looking as good this half year with everyone below where we currently are, but suspect everyone is happy that it's higher than all our predictions. Think TEL is running away with this.......
Not there yet @Rob7Lee…remember we’ve lost 200 points from the recent high, so still all to play for. I actually thought it would be higher than 8,100 but didn’t need to suggest a higher number. As you say, the higher the better for all of us in any case.
My 7810 was a simple rise of 4% over 6 months, which seemed reasonable at the time, and I'd have been fairly content with that after the strong end to 2023. Things can change quickly, of course, but with 3 weeks left I am happy that my prediction has undershot by a good distance. I'm much better at beat the bookie than this. Perhaps I could learn from that...
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
Doesn't mean they wont do it though. Not everything a Government does is written in its manifesto.
I guarantee there will be some tinkering to pensions, IHT & CGT. The last 2 are seen by the public to be "tax avoiders" and so are an easy win for any incoming Labour government.
I heard that Rachel Reeves wants the OBR to take a look at her plans & do a thorough costing.....which will take around 10 weeks. This is what scuppered Liz Truss as she said she couldn't wait that long before putting her grand plans into action.
This would mean no Budget until at least October, with any tax changes happening from April 2025 and not immediately.
I think I know the answer to this, but wanted to see if anyone had any additional insight. It’s a question in relation to the giving/receiving of a cash gift and the tax that needs to be paid on it.
Am I right in thinking that the recipient of cash gift does not need to pay any income tax on it or declare to HMRC?
My understanding is that the only tax due would be inheritance tax if the donor dies within 7 years.
I guess there would also be a need to declare any interest generated as a result of the gift/savings as well.
I think I know the answer to this, but wanted to see if anyone had any additional insight. It’s a question in relation to the giving/receiving of a cash gift and the tax that needs to be paid on it.
Am I right in thinking that the recipient of cash gift does not need to pay any income tax on it or declare to HMRC?
My understanding is that the only tax due would be inheritance tax if the donor dies within 7 years.
I guess there would also be a need to declare any interest generated as a result of the gift/savings as well.
Correct. You can gift any amount to any individual and IHT is avoided if you live for a further seven years (tax is on a sliding scale if you live for less than that).
Also, you can gift up to £3,000 (in total, not per person) in any year that will not form part of IHT calculations.
*None of this applies in regards to gifts to spouse/civil partner as these are all outside IHT.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
Have I missed this? Have they explicitly said no plans to reintroduce ?
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
Have I missed this? Have they explicitly said no plans to reintroduce ?
LTA Dropped from manifesto, but obviously could come back at a later date
Note that Labour have said they will close the inheritance tax 'loop hole'. No idea if that made the manifesto but, as Golfie says above, doesn't stop them doing it. It's interesting they have now ruled out changes to capital gains tax and corporation tax. That still leaves a lot of scope to raise tax but I'm beginning to think they are going to go 'off balance sheet' again with PFI.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
How do the authorities know if after I died that Ive given money to someone as a gift or whether this payment was for work that’s been carried out?
The other point to note here is that if it is for work carried out, the recipient should declare it for income tax purposes. Therefore you would need to be very careful before arguing this.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
And justified. In my opinion it has always been perverse and not exactly progressive that a 20% tax payer gets 20% tax relief on pension contributions and a 45% tax payer gets 45% relief.
any gifts prior to death within 7 years come first, ie they will use up the IHT allowance before anything else.
so give away less than £325k and die within 7 years they’ll be no taper relief as it simply uses up an element of the £325k.
I must admit I had totally missed this fact. Can make a difference. There is another assumption I've always made that you may be able to confirm or otherwise. First of all my estate goes solely to my wife and I know there is no IHT on that. However if I made a gift, die within 7 years of that gift, but my wife lives beyond the 7 years, then, am I right in saying, that there is no IHT on the gift made.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
And justified. In my opinion it has always been perverse and not exactly progressive that a 20% tax payer gets 20% tax relief on pension contributions and a 45% tax payer gets 45% relief.
A flat rate of 25% would be sensible.
Don’t disagree, they’ll have to unravel salary sacrifice though otherwise will make zero difference so maybe not actually that easy!
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
And justified. In my opinion it has always been perverse and not exactly progressive that a 20% tax payer gets 20% tax relief on pension contributions and a 45% tax payer gets 45% relief.
A flat rate of 25% would be sensible.
Agree not progressive. However wouldn't it do serious damage to the pensions industry. Only 25% relief when paying in but maybe taxed at 40% when drawn down. Would need a whole new ballgame of calculations for golfie and his clan
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
And justified. In my opinion it has always been perverse and not exactly progressive that a 20% tax payer gets 20% tax relief on pension contributions and a 45% tax payer gets 45% relief.
A flat rate of 25% would be sensible.
Agree not progressive. However wouldn't it do serious damage to the pensions industry. Only 25% relief when paying in but maybe taxed at 40% when drawn down. Would need a whole new ballgame of calculations for golfie and his clan
If it keeps Golfie in work and busy then win/win
The pension industry will be affected and managing draw down will need more care. Most occupational schemes have a matching employer contribution so even at 25% relief it's still a no-brainer for most people.
In the gift scenario, one thing I've heard people do is have a dated letter signed between the donor and recipient declaring the money as a gift with no intention of it being paid back. And then a copy is left in attachment with the will, so that it helps the executors when they're going through the estate. That's what we're looking to do.
In the gift scenario, one thing I've heard people do is have a dated letter signed between the donor and recipient declaring the money as a gift with no intention of it being paid back. And then a copy is left in attachment with the will, so that it helps the executors when they're going through the estate. That's what we're looking to do.
if you are within the rules the date of transfer of funds will be evidence enough I would imagine?
Transfers made at the ‘11th hour’ can’t be readily justified I suppose as historic events however injust inheritance tax can be.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
And justified. In my opinion it has always been perverse and not exactly progressive that a 20% tax payer gets 20% tax relief on pension contributions and a 45% tax payer gets 45% relief.
A flat rate of 25% would be sensible.
Don’t disagree, they’ll have to unravel salary sacrifice though otherwise will make zero difference so maybe not actually that easy!
I agree too. It is currently inequitable but as an incentive to reduce dependence on the state and force personal responsibility it has some merit.
The question in the election should be ‘what are your plans if any for pensions?’ To get an unambiguous response.
Whilst not wanting to turn this thread into anything remotely political, for those interested in Pensions it looks as if Labour have rowed back and will no longer be putting in their manifesto the bringing back of the LTA - one piece of good news this week!
My suspicion is this is a temporary relief only and something will be brought in at some stage but perhaps in a slightly different format.
Agree, I think flat tax relief is probably the easiest and most obvious change that will happen in future.
And justified. In my opinion it has always been perverse and not exactly progressive that a 20% tax payer gets 20% tax relief on pension contributions and a 45% tax payer gets 45% relief.
A flat rate of 25% would be sensible.
Agree not progressive. However wouldn't it do serious damage to the pensions industry. Only 25% relief when paying in but maybe taxed at 40% when drawn down. Would need a whole new ballgame of calculations for golfie and his clan
I think there are many people getting 40% tax relief on their pension contributions who then only pay 20% on the pension income in retirement.
This is where I think Labour will target it. Easy sell to the general public earning average income of £30kpa.
The last couple of years inflation numbers have really benefitted public sector workers mainly for the increase in their final salary / career average schemes. Those workers in the private sector with DC schemes wont have seen increases to their pensions of 8% last year.
In the gift scenario, one thing I've heard people do is have a dated letter signed between the donor and recipient declaring the money as a gift with no intention of it being paid back. And then a copy is left in attachment with the will, so that it helps the executors when they're going through the estate. That's what we're looking to do.
if you are within the rules the date of transfer of funds will be evidence enough I would imagine?
Transfers made at the ‘11th hour’ can’t be readily justified I suppose as historic events however injust inheritance tax can be.
Yes, I expect the bank accounts would show and make it clear - but getting a letter signed at least gives that concrete explanation of the purpose (ie - it’s a gift).
Comments
I never thought it would go this high.
But as Rob7Lee says the higher the better for everyone.
I'm much better at beat the bookie than this. Perhaps I could learn from that...
I guarantee there will be some tinkering to pensions, IHT & CGT. The last 2 are seen by the public to be "tax avoiders" and so are an easy win for any incoming Labour government.
I heard that Rachel Reeves wants the OBR to take a look at her plans & do a thorough costing.....which will take around 10 weeks. This is what scuppered Liz Truss as she said she couldn't wait that long before putting her grand plans into action.
This would mean no Budget until at least October, with any tax changes happening from April 2025 and not immediately.
Am I right in thinking that the recipient of cash gift does not need to pay any income tax on it or declare to HMRC?
https://www.bbc.co.uk/news/articles/cd11n2krmm4o.amp
And, yes, if the cash then generates interest ...
see: https://www.gov.uk/apply-tax-free-interest-on-savings
Note that Labour have said they will close the inheritance tax 'loop hole'. No idea if that made the manifesto but, as Golfie says above, doesn't stop them doing it. It's interesting they have now ruled out changes to capital gains tax and corporation tax. That still leaves a lot of scope to raise tax but I'm beginning to think they are going to go 'off balance sheet' again with PFI.
any gifts prior to death within 7 years come first, ie they will use up the IHT allowance before anything else.
so give away less than £325k and die within 7 years they’ll be no taper relief as it simply uses up an element of the £325k.
There is another assumption I've always made that you may be able to confirm or otherwise. First of all my estate goes solely to my wife and I know there is no IHT on that. However if I made a gift, die within 7 years of that gift, but my wife lives beyond the 7 years, then, am I right in saying, that there is no IHT on the gift made.
Transfers made at the ‘11th hour’ can’t be readily justified I suppose as historic events however injust inheritance tax can be.
This is where I think Labour will target it. Easy sell to the general public earning average income of £30kpa.
The last couple of years inflation numbers have really benefitted public sector workers mainly for the increase in their final salary / career average schemes. Those workers in the private sector with DC schemes wont have seen increases to their pensions of 8% last year.