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ASP and IHT
From April 6th 2006 you will
be able to take out a Alternatively Secured Pension (ASP).
In essence this means that instead of being forced to take
an annuity at age 75 you will be able to take money from the
fund without converting it into an annuity. So when you die
there is likely to be a sizable sum left over which would
revert to your estate.
Currently this is what happens if you die before age 75 so
the spouse ( or other dependent) gets the value of the fund
tax free. Or the money can be passed to whoever you like but
a tax of 35% is levied (still better than 40% IHT).
It was widely thought that this would be the same for ASP's
- not so - you will still be able to pass the money to your
spouse or dependent free of tax but when they die this
amount will revert to your
estate, despite it possible
having been wound up years ago!!!!
A bonanza for accountant etc who will have to work out just
what the value is for IHT purposes. The IHT will be taken
from the fund and IHT thresholds at the time of death of the
beneficiary will perhaps lessen the Burdon.
So even when you have been dead for years the government
will still be taxing you!
22nd March'06 - Seek advice
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