Thanks Marc. But does it make sense in the following scenario.Yes this is absolutely a great strategy where you have some guaranteed benefits and an additional pension pot - life isn't a dress rehearsal and there are no prizes for being the richest person in the graveyard
Expenditure in retirement declines by around 1 to 2%pa in general so more now rather than later makes a lot of sense for some people
Taking income at 20% tax and giving away via annual 3k pa gift means family potentially only pays 20% tax on gifts/inheritances rather than 33%
Marc Westlake CFP, TEP, APFS, QFA, EFP
Chartered, Certified and European Financial Planner
Registered Trust & Estate Practitioner
Everlake
You currently have combined exemptions for the children of €1.675M so unlikely to be any inheritance tax under the current rules.Thanks Marc. But does it make sense in the following scenario.
Couple have 5 children that could be helped out to a degree over next 10 to 12 years.
Total assets of the couple are:
Cash available 300k
PPR value 500k ( no mortgage)
Pension pots 350k
If both were to leave all equally to 5 kids they would each receive under the inheritance tax threshold .
Thanks. Will never have a very large pension fund. Combined now is €350k and retired.You are highly unlikely to be in a position to have any tax free pension income. So using your full 20% band now could avoid a future position where you have a very large pension fund and need large funds for a family member, and are forced into the 40% tax band.
Does the 350k pot not impact on the Invalidity Pension ?50k comes from
Invalidity Pension 12k x 2
4% drawdown on 350k pot
Public service pension 12k
Couple can live on 42k net p.a
Invalidity pension will still be paid. invalidity pension will be taxed as per any other income.Does the 350k pot not impact on the Invalidity Pension ?
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