There are currently some interesting rumblings in the UK regarding inheritance tax (IHT). On the 28 January 2020, a cross-party group of MPs proposed reducing the 40% IHT rate down to 10%. The All-Party Parliamentary Group was set up over a year ago following a request by the Chancellor to review the IHT system, and also proposed that almost all tax reliefs (including the “seven-year gifting rule”) be abolished. Instead, the Group proposed that estates valued over the IHT threshold (£325,000 in 2019-20) face a 10% IHT rate, whilst estates worth over £2m would be taxed at 20% upon death.
Here at WMM in Oxfordshire, our financial planning team has received many enquiries about the prospects for the stockmarket in 2020. Almost certainly, these concerns have been driven by alarmist headlines about global recession from the UN, or worldwide debt crisis from the World Bank. These fears will have been stoked more recently by the outbreak of the COV19 virus which threatens to push countries such as Singapore into recession, and which could cost the global economy as much as £217bn in the first quarter of 2020.
Many people are faintly aware that they should be saving towards their long term future. Why are pensions so often recommended by financial advisers as a way to achieve this? The answer is fairly straightforward. In 2019-20, a pension offers a tax-efficient long-term savings plan, with other important benefits depending on your scheme.