Uk Inheritance tax (IHT) on supporting my girlfriend.

[persimmon]

re QNUPS . Thanks for the link . Could you tell me why QNUPS is better than a UK based SIPP ( private pension ) ? which is also free from IHT when it`s passed on ?

[MrBanks]

12 hours ago, persimmon said:

re QNUPS . Thanks for the link . Could you tell me why QNUPS is better than a UK based SIPP ( private pension ) ? which is also free from IHT when it`s passed on ?

Open this link and read the comparison between QROPS, QNUPS and SIPPS.

[MrBanks]

Just now, MrBanks said:

Open this link and read the comparison between QROPS, QNUPS and SIPPS.

Whops, forgot the link…… senior moment ????:

https://www.aesinternational.com/blog/the-differences-between-qrops-qnups-and-sipps

[DodgerRodger]

I've been following this thread of late and by coincidence spotted this newspaper article on the subject today.  Some may find it insightful...

 

https://www.thisismoney.co.uk/money/experts/article-12611045/Avoid-inheritance-tax-moved-Australia.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html&_gl=1*encpou*_ga*MTQwOTA3MDQ2Ny4xNjg2MzgzODQz*_ga_XE0XLFFF16*MTY5NjkzMTI0Mi40MzAuMS4xNjk2OTMxNjIyLjAuMC4w&_ga=2.133917962.586128520.1686383843-1409070467.1686383843

[UKresonant]

Remember that if there is the slightest thing out place, should you transfer your pension outside the UK, HMRC will come after you for a 55% (last time I looked) tax charge.

That's why some people scammed out of ALL their pension, lose everything then owe HMRC 55% of the pension they no longer have.

If you are still frequently in the UK you will always be domicile there probably, so doubt it would be helpful.

Have you nominated her on the expression of wish form of the relevant pension companies?

Some occupational and SIPP / DC you can pre-advise the identity (in fact one of them I had to either provide a Birth cert, but they accepted and witnessed the wife's original Thai passport,  passport, copy was stamped, signed by administrator, and it and put in their files). Many occupational pensions and SIPP maybe written in Trust out with your IHT issue, as an expression of wish to the trustees, which 99% is what they do. But if you had taken up with someone for a couple of weeks, changed the nomination to them, leaving a wife and kids  in financial distress, the trustees can redirect to the wife!

Worth considering is the pension situation, as you may spend money and keep more pension tucked up in it's blanket.

 

Anyway good night, good luck in getting your head around it (I must review this subject again soon)

 

Edited October 12, 2023 by UKresonant

[persimmon]

I think part of the problem with a UK pension ( SIPP ) is in the detail of how it`s transferred to someone who is not a UK resident . The SIPP provider I contacted was rather vague and evasive and I got the impression there was a significant risk that they would deduct 40 % before sending the cash .

[Polar Bear]

On 10/7/2023 at 8:45 PM, persimmon said:

Also , something that hasn`t been mentioned - pensions can be inherited free from IHT , although if the beneficiary is not a UK resident , this might be a complication ( I tried to get more detail on this but haven`t been able to get a definitive answer yet ) .

I don't know if it's the same because we are both British, but we've been non-dom and non-resident for years. My husband recently inherited a pension from his mother, and it was exempt from IHT. They did deduct income tax at 40%. He could have claimed some of that back, but we just offset it against his tax bill instead. 

[Mike Teavee]

On 10/6/2023 at 2:21 PM, Neeranam said:

Interesting, thanks for posting. 

Not sure what you mean about your wife having money in Kbank joint account. Surely it is both of your money?

My mother gave her house to me a few years back to hopefully avoid Inheritance tax. Not sure how that will pan out, if she dies before me. 

I believe, as a Thai citizen and resident, it makes no difference regarding IHT.

If it does, I want to know.  

Is your mother still living in the house? & if she is, is she paying market rates for rent? 

 

If the Answer is "Yes" she is still living there & "No" she's not paying market rates for rent then HMRC could see that "Gift" as a "Gift that she still benefits from" so will tax the inheritance as if the house was still part of the estate. 

 

See https://www.gov.uk/inheritance-tax/gifts

Giving gifts you still benefit from

If you give something away but still benefit from it (a ‘gift with reservation’), it will count towards the value of your estate.

Gifts with reservation include:

• giving your home to a relative but still living there
• giving away a caravan but still using it for free for your holidays
• giving away a valuable painting but still displaying it in your house

Read further guidance on when a gift with reservation counts towards the estate’s value.

 

 

@davee58 I don't know how much you "Gift" to your GF but you're entitled to give away up to £3,000 pa (covered in the article linked to above) so that's the 1st 11,000b pm covered, am sure a reasonable argument could be made that any remainder was for costs involved in maintaining the house you do live in when you are in Thailand.

 

 

Edited October 12, 2023 by Mike Teavee
Include HMRC info/link

[Neeranam]

3 hours ago, Mike Teavee said:

Is your mother still living in the house? & if she is, is she paying market rates for rent? 

 

If the Answer is "Yes" she is still living there & "No" she's not paying market rates for rent then HMRC could see that "Gift" as a "Gift that she still benefits from" so will tax the inheritance as if the house was still part of the estate. 

 

See https://www.gov.uk/inheritance-tax/gifts

Giving gifts you still benefit from

If you give something away but still benefit from it (a ‘gift with reservation’), it will count towards the value of your estate.

Gifts with reservation include:

• giving your home to a relative but still living there
• giving away a caravan but still using it for free for your holidays
• giving away a valuable painting but still displaying it in your house

Read further guidance on when a gift with reservation counts towards the estate’s value.

 

 

@davee58 I don't know how much you "Gift" to your GF but you're entitled to give away up to £3,000 pa (covered in the article linked to above) so that's the 1st 11,000b pm covered, am sure a reasonable argument could be made that any remainder was for costs involved in maintaining the house you do live in when you are in Thailand.

 

 

Thanks for the info. As far as I know, she doesn't pay rent. I'll check with my siblings who co-own the house.