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Savings and Investments thread
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Nothing for me, but I've reduced my holding to £5k - £150 for the missus on max.0
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Zero on £20k0
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So here is what I have learnt (or think I have) last night about the new IHT rules as they affect those of us who live, or decide to live abroad.
First the good news: the test for whether we were subject to IHT was whether HMRC deemed us to be still "domiciled" in the UK. This concept was a disgrace because it was not something defined in law or anywhere else, it was whatever HMRC thought it could get away with. See the Richard Burton case. But maybe don't bother because this Government has quietly done away with it. The test is now based on whether you are resident in the UK. Hats off to them for this return to rationality.
Ah, but wait...whereas previously if HMRC couldn't do a Burton on you, you escaped the IHT grip, now they have brought some grip back. If you are non-resident but still have "UK -situs assets" those assets will be deemed to be IHT-able. And it turns out that "assets" include UK bank savings, and investments in stocks and funds via a UK platform such as H-L or AJ Bell. And there's worse. It seems that from April 2027, personal pension pots, previously exempt, will now be included in the IHT-able net.
The £325k exemption still applies, and I think will apply to the spouse too if they are also UK citizens. But my spouse is not, so anything I hold based in the UK above 325k, HMRC can levy 40% on. So now, I have to focus on actively moving savings investments out of UK banks, and H-L. Not sure how that helps the country, and for sure I won't be happy doing it, because retail banking and investment platforms is a sector where we are best in Europe. One interesting exemption is gilts. They are generally exempt, and I suppose could be a safe alternative to money market funds and high interest savings accounts. But NS&I products are not exempt. I don't know why, if gilts are. Some twat in the Treasury could doubtless tell us...
All thoughts on this admittedly niche topic would be very welcome. Those of you thinking of clearing off certainly need to be aware of these new rules.0 -
The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.3 -
I was aware the rules had changed, so yes if I clear off as you put it, you don't want to be leaving more than £325k in the UK (or up to the £1m depending on property, spouse, children etc). I'm OK with that, feels a little unfair to want the benefit of investing in the UK but not the taxation but take your point, if you move it all out now hardly helps the UK.PragueAddick said:So here is what I have learnt (or think I have) last night about the new IHT rules as they affect those of us who live, or decide to live abroad.
First the good news: the test for whether we were subject to IHT was whether HMRC deemed us to be still "domiciled" in the UK. This concept was a disgrace because it was not something defined in law or anywhere else, it was whatever HMRC thought it could get away with. See the Richard Burton case. But maybe don't bother because this Government has quietly done away with it. The test is now based on whether you are resident in the UK. Hats off to them for this return to rationality.
Ah, but wait...whereas previously if HMRC couldn't do a Burton on you, you escaped the IHT grip, now they have brought some grip back. If you are non-resident but still have "UK -situs assets" those assets will be deemed to be IHT-able. And it turns out that "assets" include UK bank savings, and investments in stocks and funds via a UK platform such as H-L or AJ Bell. And there's worse. It seems that from April 2027, personal pension pots, previously exempt, will now be included in the IHT-able net.
The £325k exemption still applies, and I think will apply to the spouse too if they are also UK citizens. But my spouse is not, so anything I hold based in the UK above 325k, HMRC can levy 40% on. So now, I have to focus on actively moving savings investments out of UK banks, and H-L. Not sure how that helps the country, and for sure I won't be happy doing it, because retail banking and investment platforms is a sector where we are best in Europe. One interesting exemption is gilts. They are generally exempt, and I suppose could be a safe alternative to money market funds and high interest savings accounts. But NS&I products are not exempt. I don't know why, if gilts are. Some twat in the Treasury could doubtless tell us...
All thoughts on this admittedly niche topic would be very welcome. Those of you thinking of clearing off certainly need to be aware of these new rules.
I'm not sure why if you left the UK a long time ago you want to still keep investments here? Doesn't that add other complexity/challenges such as exchange rate?
If we're honest it was a massive loop hole. Whilst it annoys me, as I was also using it as part of my IHT planning, it probably is the right thing to do.Southbank said:The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.
If you would have spent it, you can still do that now?1 -
£150 on half and £100 for ‘Er indoors’ on similar.0
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@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?0
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I might look into your last point but it might be as simple a fact that Gilts are tradable & are a risk whereas NS&I Bonds are not.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?0 -
I'm with you to a certain extent, don't like IHT as a tax, I think we should tax people through their lives, not upon death.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?
Why did you pay CGT etc, was that because you were still UK tax resident?0 -
Rob7Lee said:
I'm with you to a certain extent, don't like IHT as a tax, I think we should tax people through their lives, not upon death.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?
Why did you pay CGT etc, was that because you were still UK tax resident?For non UK tax residents there is no CGT to pay on for example UK stocks and shares - but CGT on property/land is an exception to that.The lesson there - if moving abroad, make sure you sell your main UK residence before losing UK tax status.2 -
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Best PSB month for ages: £275 for me and £175 for Margaret (Total £450) on 2x max holdings. Annualised, that equates to a (theoretical) 5.4% net return. Of course, the inevitable ‘f@ck all’ next month will blow the theory but let’s wallow in the glory whilst it’s here. Based on other posts on here this month, looks like I’ve done better than the average.0
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Correct of course. Furthermore I had to pay UK income tax on the rental income even though they accepted me as non-resident from around 1996 ( a fact they currently pretend to have forgotten as I try to get a simple confirmation from them so that I can access my SIPP gross of withholding tax.). Again, there is no obvious reason why such an exemption should exist, and the Czechs ( and many other countries) could feel pissed off about that and wonder whether the UK is serious about double taxation treaties). But since it was unavoidable my accountant proposed that we might as well report all UK income such as dividends and interest, which was also subject to withholding tax until fairly recently. So a decent amount of tax paid each year, virtually nothing back in return, and they even tried to take my vote away, only to sheepishly give it back again ( well done, Sunak, you surprised me there). And the irony is that I never said to myself “ I want to leave Britain”, not for tax or any other reason. I left because there was somewhere else where things were happening that excited me and I fancied being part of it. I think that’s an important element of a successful transfer abroad - having a positive motivation to be in the other place, rather than it just having more sunshine or lower taxes. Then again I was much younger then, priorities were different.bobmunro said:Rob7Lee said:
I'm with you to a certain extent, don't like IHT as a tax, I think we should tax people through their lives, not upon death.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?
Why did you pay CGT etc, was that because you were still UK tax resident?For non UK tax residents there is no CGT to pay on for example UK stocks and shares - but CGT on property/land is an exception to that.The lesson there - if moving abroad, make sure you sell your main UK residence before losing UK tax status.
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I'm obviously not sure of your personal circumstances. However do you realise payouts from your pension scheme upon death are totally free of all tax irrespective of beneficiary. Therefore it can be advisable to prepare your "expression of wish form" (or whatever your pension scheme now calls it) to pay the sums (or part of it) to your children rather all to your spouse. The benefit of this is your children get it tax free. If it all goes to your spouse it is likely to come into her IHT calculations upon her death.Southbank said:The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.0
