Santander brand replaces: Abbey, Alliance & Leicester and Bradford & Bingley

Anyone with accounts in more than one of these institutions should be aware that the financial protection currently offered may be reduced. The maximum possible protection, £50,000 x 3, will be reduced to £50,000 x 1.

Emergency Budget 22 June 2010

Coalition financial planning highlights

The following are some of the interesting points arising from the Conservative - Liberal coalition Government:

• Emergency budget within 50 days.
• Substantial increase in the personal income tax allowance from April 2011
• Taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities
• Possible restrictions on higher rate tax relief on pension contributions
• Unlikley to be immediate substantial changes to Inheritance Tax
• An increase in Employer National Insurance thresholds
• Phasing out the default retirement age, set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women
• End to the rules requiring compulsory annuitisation of pensions at 75.
• Expectation that VAT will increase to 20%
• Limitation to the Child Trust Fund
• Fair and transparent payments to Equitable Life policy holders, for their relative loss as a consequence of regulatory failure

Free guides available from the REFP website

Download our latest guides to:

• 2010 Budget
• Inheritance tax planning
• SIPPs
• Wealth planning

"Fryer and Ors v HMRC" - tax on pension death benefits

The recent ruling in the case of “Fryer and Ors v HMRC” is another example of HMRC tightening the screw.

The case of “Fryer and Ors v HMRC” concerned an individual who deferred taking her pension benefits at the notional retirement age of 60 and died age 61. The lady in question had no need for the income at that time having sold her business.  

HMRC successfully contended that the deceased, by deferring pension benefits, had made a disposition for inheritance tax purposes and that the pension death benefits should be chargeable to inheritance tax.

Anyone who has deferred starting benefits from a UK pension may wish to reconsider their position. For those with pensions who have not reached retirement age it may be appropriate to extend the normal retirement age to 75 (assuming that no penalties apply).