Trust in pensions
With pension reform on the horizon, now is the time to review your plans for the future and to ensure that your loved ones do not miss out or pay unnecessary tax on your pension benefits.
From this month (April 2015), pensions will become largely inheritance tax-free if you pass away before the age of 75. A 45% tax charge still arises for pensions being passed on by those who pass away over the age of 75 but this could be reduced to your beneficiaries’ tax rate from 2016.
This new flexible regime will be welcomed by many but it is important to ensure that careful consideration is given to who might benefit from your pension pot.
Who inherits your pension pot is decided by the pension scheme trustees. You should ensure that adequate nominations are made to guide them in the event of your untimely death. If you do not do this then you cannot guarantee that those who really need it will benefit from your pension pot.
If you are not happy with the idea of your pension pot being controlled by the scheme trustees then it is possible to set up your own trust with trustees of your choice, to receive the pension benefits. By doing this you can ensure that what might be a considerable sum of money is properly managed by people you trust and that it is protected for the benefit of your loved ones, whatever their circumstances might be. Whether this is right for you will depend on a number of circumstances which we can assist you in identifying.
At GA Solicitors we believe it is important to plan for all aspects of your future and we are well placed to provide you with comprehensive advice on inheritance, wills and succession planning.
At GA Solicitors our dedicated, qualified and understanding team will be pleased to meet with you. Many members of our wills, trusts and probate team are also members of the Society of Trust and Estate Practitioners and Solicitors for the Elderly so you can rest assured that you are in safe hands.
Matthew Rose, Associate