Speaker Mark Leeming of Hudson Foster Financial Services

Mark is a Wealth Management Consultant with the Financial Solutions side of Hudson Foster who are a Financial Solutions and Risk Management company based in Ilkley. Keith Brown used to work in the Insurance side of this business. Their web site is www.hudsonfoster.co.uk

He concentrated on giving us an update on the recent tinkering that the government has done with regard to Pension Schemes and how that might be useful in regard to inheritance tax: -

Pensions

Since April 2015 when the government permitted any amount to be withdrawn from a pension scheme some £9.2 billion has been withdrawn. This might not be the right thing to do from an inheritance tax point of view.as a pension can now be passed onto beneficiaries outside the inheritance tax rules. If soeone dies before age 75 the funds can be paid out tax free. If they are over 75 the fund can be passed as a pension fund to the beneficiaries who can then withdraw the funds (if they are over 55) and only pay tax at their normal tax rate. Thus a pension could theoretically be passed down many generations.

Before the recent changes a pension scheme that still contained funds at death was taxed at 55% so investment planning concentrated on reducing the fund to nil and putting the money in other vehicles. This has been turned on it's head and it can now be better to live off other savings first.

Currently the nil band for inheriatnce tax is £325,000 per person or £650,000 per couple. However from 6/4/17 there will be an additional £100k per person £200k per couple) which can be used against the value of the main residence. This will rise to £175k each (£350k per couple) by 2020.

In addition to using pension funds to avoid inheritance tax it is also possible to invest in AIM market shares and/or business assets and property in unquoted companies. If these assets are held for 2 years or more they are excluded from inheritance tax.