Pensions – Protected from taxes?  Think again!

  • Yes, pension contributions are deducted from taxable income
  • Yes, investments in a pension grow free from income and capital gains tax
Do you have rental or other income? Are you likely to use all your pension in your lifetime?
NO, The good news is that there no Inheritance tax on pensions. Hence, you should use your assets before dipping into your pension.

Close Up Photo of Red Stop Sign

HOWEVER, if you die after 75 years of age as most of us will, the pensions are taxed as INCOME TAX in hands of beneficiaries in that year. So you saved 40% tax, children pay 45% tax!

Solution:  Make sure your pension is in a provider that supports a flexible drawdown option. Most company pensions do not.

Need help? Call me to discuss your options and overall inheritance planning.

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