What is Changing?
Simply put, IHT will be levied on most DC pensions from 6 April 2027. Right now, they aren’t.
What is astonishing is that HMRC have not fully published their guidance on how this will work. This hasn’t stopped people making big decisions about their estates now though. Why would it.
In this age of seemingly endless information available, looking to social media and artificial intelligence searches is not perhaps the smartest way to make decisions. HMRC won’t be publishing their full operating guidelines until just weeks before the new changes come into force. Perhaps Consumer Duty and Treating Customers Fairly is for everyone else but not HMRC.
What Can Be Done Now?
Simply put, do not make snap decisions without seeking advice from your financial adviser.
Whilst a pension may seem the most appropriate solution now, given the changes coming, any financial adviser that manages a client’s situation well will be looking at all the alternatives alongside a client’s objectives and situation before simply taking an instruction. Taking instructions isn’t advice.
Pensions are still very attractive. Tax relief; growth free of capital gains and income tax; spousal exemption, etc… Just because one rule has changed doesn’t automatically mean they are now poor value.
Your Adviser’s Role is Not Just About Performance
The lack of guidance means that a financial adviser can amplify the value you receive around these decisions.
Understanding the implications of how the estate could well be impacted by these decisions. Ensuring they communicate to clients on complicated scenarios such as Withholding and Payment Notices are going to be critical.
We at Rutherford Hughes will help clients think about some of the trade-offs, the impacts, jargon free communication and how it may well effect future generations.
Seeing past the short-term noise and not letting decisions be driven by sensationalist headlines from elements of the press is what we are here to do. Putting clients first.
Family governance and oversight | Rutherford Hughes Ltd
Inheritance Tax and my Pension – What is Going to Happen? | LinkedIn
