View more on these topics

HMRC confirms IHT exemption for Asp income

The Government says withdrawals from unsecured or alternatively secured pensions will be considered as income for inheritance tax purposes, offering new IHT planning opportunities for advisers.

HM Revenue & Customs has confirmed the rules in correspondence with Skandia. It had been unclear whether income from USP or Asp was considered as income or a mixture of income and capital for the purposes of the IHT exemption for normal expenditure out of income.

Skandia says this means clients who have excess income from USP or Asp can give it away, for example, to children or grandchildren, without incurring any IHT liability.

There is no need to survive gifts by seven years to avoid liability as they are exempt. On the death of the donor, a breakdown of expenses is required to prove their standard of living was not affected by the gifts.

Skandia head of tax and financial planning Colin Jelley says: “Advisers can now be clear on exactly where clients stand and make plans accordingly. The normal expenditure out of income exemption has no financial limit so advisers should consider whether its application would be relevant for clients.”


Axa revises protection rates

Axa has revised its rates for level and decreasing life cover as well as guaranteed level or earlier critical illness cover and guaranteed decreasing or earlier critical illness cover.The firm says around 45 per cent of premiums have reduced in price, by 1.5 per cent on average. The other 55 per cent have either stayed […]

Central line

Too little attention in the RDR debate has been focused on the consumer. Ultimately, there is a need to look back at the RDR and its core objectives. There is a need to make sure that we get a better and not just different outcome from this review. There must be a recognition that consumers share responsibility. We, as IFAs, have a unique level of access to consumers’ wants and needs.

Low bids see Rock’s share price plunge

Northern Rock’s share price fell to an all-time low on Monday after the firm said potential bids valued it at “materially below” its market price.A Treasury statement saying it might not guarantee the Bank of England’s loans past February helped spark the sell-off although the Treasury signalled that it was willing to discuss any proposals […]

What are the key changes to transform pensions?

By Fiona Tait, pensions specialist In her final article for Royal London, Fiona Tait reviews key changes she believes have transformed, or will transform, pensions. In my 12 years with Royal London I have been paid to review, study and explain the numerous changes to pension legislation which have transformed our industry in that time. This is […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment