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01473 359720
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01206 867551
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01245 254780
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0208 221 8282

Professional, Proactive,
Partner-led advice

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LONDON: 0208 221 8282
CHELMSFORD: 01245 254780
COLCHESTER: 01206 867551
IPSWICH: 01473 359720

Email: info@lbgroupltd.com

PENSION FUNDS CAN BE VERY EFFECTIVE IN ESTATE PLANNING

PENSION FUNDS CAN BE VERY EFFECTIVE IN ESTATE PLANNING

We have featured the tax efficiency of pension fund investment in a number of recent newsletters. As well as the increased flexibility in terms of drawdown arrangements that were introduced in April 2015 there were some important changes to what happens to the undrawn funds on death. These changes mean that your pension fund can be passed to survivors’ tax efficiently.

Where the pension scheme member dies under age 75 certain lump sum death benefits are now tax-free. In particular a drawdown or flexi-drawdown pension fund lump sum death benefit or an uncrystallised funds lump sum death benefit.

Where the member at the time of their death was age 75 or older the special lump sum death benefit charge on the fund will be 45%. However, if a nominated beneficiary wants to draw down income each year rather than take the lump sum the amounts drawn would be taxed at their marginal income tax rate. It has recently been reported that there are currently £2 billion of pension assets in drawdown where the beneficiary is aged under 55 suggesting that a significant number of individuals have taken advantage of the new rules.

Note that cash and quoted shares, including those held within an ISA, are subject to inheritance tax on death whereas pension fund assets are generally free from inheritance tax. It may therefore be more tax efficient to spend or give away cash and shares rather than draw on the pension fund.

Please contact us if you would like to discuss estate and inheritance tax planning in more detail.

PENSION FUNDS CAN BE VERY EFFECTIVE IN ESTATE PLANNING

PENSION FUNDS CAN BE VERY EFFECTIVE IN ESTATE PLANNING

LB Group Chartered Accountants in London, Essex and Suffolk can assist with this. Local Accountants and Tax Advice.

LB Group Chartered Accountants are a top 75 Firm in the UK of Accountants providing Audit, Tax and Advisory Services across a variety of industries.

With offices in London, Chelmsford, Colchester and Ipswich our partner led approach with fixed fee options provides a professional and proactive service to both business and personal clients.

LB Group Chartered Accountants offer customised Accountancy, Audit and Tax solutions along with other Advisory Services including Corporate Finance, Insolvency and Financial Solutions tailored to meet your needs.

At LB Group Chartered Accountants, we are passionate and committed to providing excellent customer service for each and every client. Our organisation is built on strong relationships with our customers and business associates.

LB Group Limited registered in England © 2018 Company Number: 2796741. Associate Directors are not statutory directors of the firm.

Chubb Insurance Company of Europe S. E, Policy Number: 82182733E. Limit of Indemnity £4 million on any one claim.

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