Who Wants to be a ISA Millionaire
Discussion
JulianPH said:
DoubleSix said:
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Mostly correct, however the tax treatment of a SIPP is not “exactly the same” as an ISA.Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Edited by DoubleSix on Sunday 20th May 09:34
DoubleSix said:
JulianPH said:
DoubleSix said:
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Mostly correct, however the tax treatment of a SIPP is not “exactly the same” as an ISA.Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Edited by DoubleSix on Sunday 20th May 09:34
My example was all about using SIPPs as an IHT vehicle whereby the parent/grandparent never intends to draw from the scheme, but places funds into it to pass on to children/grandchildren.
These funds become immediately free of any tax in their hands upon death. With any other form of trust you would have to wait seven years for this - and could have a tax liability on growth and income for until they turn 18, when they are liable for this.
More so (as I said), this route gets the benefit of tax relief on the money put aside for an inheritance. Once the money is inside the SIPP the tax treatment is the same as with an ISA (as you are not taking any income yourself), which I did also say.
I didn't appreciate the 'mostly correct' comment (I have to admit) as it seemed very condescending given this is what I do for a living.
Also, only 75% of what you draw from a SIPP is subject to income tax, not "any" of it.
Cheers!
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Thanks mate - much appreciated. I have to admit the finer (and possibly most important!) details like this go over the top of my head. I might have to drop you an email one day!Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
JulianPH said:
DoubleSix said:
JulianPH said:
DoubleSix said:
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Mostly correct, however the tax treatment of a SIPP is not “exactly the same” as an ISA.Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Edited by DoubleSix on Sunday 20th May 09:34
My example was all about using SIPPs as an IHT vehicle whereby the parent/grandparent never intends to draw from the scheme, but places funds into it to pass on to children/grandchildren.
These funds become immediately free of any tax in their hands upon death. With any other form of trust you would have to wait seven years for this - and could have a tax liability on growth and income for until they turn 18, when they are liable for this.
More so (as I said), this route gets the benefit of tax relief on the money put aside for an inheritance. Once the money is inside the SIPP the tax treatment is the same as with an ISA (as you are not taking any income yourself), which I did also say.
I didn't appreciate the 'mostly correct' comment (I have to admit) as it seemed very condescending given this is what I do for a living.
Also, only 75% of what you draw from a SIPP is subject to income tax, not "any" of it.
Cheers!
Because if you did you'd be shot for ignoring a negative effect of a chosen solution. If the goal were IHT mitigation then you'd be wise to consider the potential for an income to be drawn or not drawn and whether the chosen solution impacts upon that. Of course, you've altered the little scenario in your head to suit but the position I took was that we don't know if this 'theoretical being' would draw an income or not so sensible to point out a potential drawback.
Your statement that SIPPs and ISA are taxed the same was just plain wrong, sorry - you can't retrospectively narrow the scope of the scenario to suit.
If you are declaring yourself as an adviser I am even more surprised (concerned!) you would suggest a SIPP as a means of mitigating IHT without even highlighting the effects of death post 75 - scary.
Edited by DoubleSix on Sunday 20th May 18:46
DoubleSix said:
I think the idea is that each generation contributes and grows the family wealth whilst also enjoying the benefits.
The point being it’s bloody hard to do that if you start with FA.
I'm in two minds about this. I like the idea of 'building family wealth' and I admire the few friends I have, who have benefitted from family wealth but also share the foresight and collective 'greater good' mindset of their forebears and thus do their best to preserve capital.The point being it’s bloody hard to do that if you start with FA.
On the other hand I was born with FA and will inherit FA. My two brothers and I have done well to achieve decent incomes despite the odds including poor educations, and are good examples of self-starters. Every other member of my family though, has established a track record of plundering whatever meagre wealth comes within reach.
I don't know what my own children (too young to tell) and grandchildren (don't exist yet) will be like in the future, nor do I know if I'll be able to amass appreciable capital in my lifetime, but I feel very reluctant to live my life as though its sole purpose is to try and shore up the following generation of my family when I've had to start with absolutely nothing. I'm also well aware from experience, that it only takes one or two individuals down the line, to utterly squander whatever provisions I am able to pass down.
DoubleSix said:
JulianPH said:
DoubleSix said:
JulianPH said:
DoubleSix said:
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Mostly correct, however the tax treatment of a SIPP is not “exactly the same” as an ISA.Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Edited by DoubleSix on Sunday 20th May 09:34
My example was all about using SIPPs as an IHT vehicle whereby the parent/grandparent never intends to draw from the scheme, but places funds into it to pass on to children/grandchildren.
These funds become immediately free of any tax in their hands upon death. With any other form of trust you would have to wait seven years for this - and could have a tax liability on growth and income for until they turn 18, when they are liable for this.
More so (as I said), this route gets the benefit of tax relief on the money put aside for an inheritance. Once the money is inside the SIPP the tax treatment is the same as with an ISA (as you are not taking any income yourself), which I did also say.
I didn't appreciate the 'mostly correct' comment (I have to admit) as it seemed very condescending given this is what I do for a living.
Also, only 75% of what you draw from a SIPP is subject to income tax, not "any" of it.
Cheers!
Because if you did you'd be shot for ignoring a negative effect of a chosen solution. If the goal were IHT mitigation then you'd be wise to consider the potential for an income to be drawn or not drawn and whether the chosen solution impacts upon that. Of course, you've altered the little scenario in your head to suit but the position I took was that we don't know if this 'theoretical being' would draw an income or not so sensible to point out a potential drawback.
Your statement that SIPPs and ISA are taxed the same was just plain wrong, sorry - you can't retrospectively narrow the scope of the scenario to suit.
If you are declaring yourself as an adviser I am even more surprised (concerned!) you would suggest a SIPP as a means of mitigating IHT without even highlighting the effects of death post 75 - scary.
Edited by DoubleSix on Sunday 20th May 18:46
You have proved beyond any doubt that you have no idea what you are talking about and have no grasp of the issue being discussed.
Do you even understand the concept of what I was saying?!
JulianPH said:
I am sorry you have chosen to make this an argument. I have not altered my position in the slightest.
You have proved beyond any doubt that you have no idea what you are talking about and have no grasp of the issue being discussed.
Do you even understand the concept of what I was saying?!
Don't worry about his rather tetchy response Julian. I thought you were making a useful and interesting contribution.You have proved beyond any doubt that you have no idea what you are talking about and have no grasp of the issue being discussed.
Do you even understand the concept of what I was saying?!
Right, as a complete investment ignoramus this thread made me think I need to start doing something with a stocks and shares ISA
Had a read of this - https://www.moneysavingexpert.com/savings/stocks-s...
Anyone have good/bad experiences to share about some of the providers (nutmeg / evestor perhaps?)
I'm inclined towards medium risk funds.
Also as a contractor are there any available tricks to use Ltd company funds for investing the pre-tax cash?
Had a read of this - https://www.moneysavingexpert.com/savings/stocks-s...
Anyone have good/bad experiences to share about some of the providers (nutmeg / evestor perhaps?)
I'm inclined towards medium risk funds.
Also as a contractor are there any available tricks to use Ltd company funds for investing the pre-tax cash?
Personal view having gone through a similar process is if you're looking at the likes of Nutmeg, save yourself some fees and just pick a suitable Vanguard Lifestrategy and/or trackers and be done with it.
If you're prepared to put some time in you can learn a lot in a reasonably short timeframe, in theory at least
If you're prepared to put some time in you can learn a lot in a reasonably short timeframe, in theory at least
b
hstewie said:
hstewie said: Personal view having gone through a similar process is if you're looking at the likes of Nutmeg, save yourself some fees and just pick a suitable Vanguard Lifestrategy and/or trackers and be done with it.
If you're prepared to put some time in you can learn a lot in a reasonably short timeframe, in theory at least
That is what I have done. I spoke to several IFAs and found the good ones were mainly looking for long term retainers. I found also that once you mention you have been researching Vanguard's products they were not really interested (perhaps because they know from experience you were unlikely to become a client). If you're prepared to put some time in you can learn a lot in a reasonably short timeframe, in theory at least
And I found quite a few IFAs as DA described - not the sharpest tools in the box...
DoubleSix said:
Well, I'm assuming you don't give investment or estate planning advice for a living then. (edit: oh dear)
Because if you did you'd be shot for ignoring a negative effect of a chosen solution. If the goal were IHT mitigation then you'd be wise to consider the potential for an income to be drawn or not drawn and whether the chosen solution impacts upon that. Of course, you've altered the little scenario in your head to suit but the position I took was that we don't know if this 'theoretical being' would draw an income or not so sensible to point out a potential drawback.
Your statement that SIPPs and ISA are taxed the same was just plain wrong, sorry - you can't retrospectively narrow the scope of the scenario to suit.
If you are declaring yourself as an adviser I am even more surprised (concerned!) you would suggest a SIPP as a means of mitigating IHT without even highlighting the effects of death post 75 - scary.
To claim ISAs and SIPPs are taxed the same is a fairly basic but fundamental error. This is exactly why I don’t use financial advisers; I have met with 3 in the past, asked each of them fairly basic questions which they couldn’t answer and walked away without having to pay a chunk of commission to someone offering no value.Because if you did you'd be shot for ignoring a negative effect of a chosen solution. If the goal were IHT mitigation then you'd be wise to consider the potential for an income to be drawn or not drawn and whether the chosen solution impacts upon that. Of course, you've altered the little scenario in your head to suit but the position I took was that we don't know if this 'theoretical being' would draw an income or not so sensible to point out a potential drawback.
Your statement that SIPPs and ISA are taxed the same was just plain wrong, sorry - you can't retrospectively narrow the scope of the scenario to suit.
If you are declaring yourself as an adviser I am even more surprised (concerned!) you would suggest a SIPP as a means of mitigating IHT without even highlighting the effects of death post 75 - scary.
Edited by DoubleSix on Sunday 20th May 18:46
85Carrera said:
To claim ISAs and SIPPs are taxed the same is a fairly basic but fundamental error. This is exactly why I don’t use financial advisers; I have met with 3 in the past, asked each of them fairly basic questions which they couldn’t answer and walked away without having to pay a chunk of commission to someone offering no value.
I never stated ISAs and SIPPs were taxed the same. I said if you were using a SIPP as an IHT planning vehicle it would get exactly the same tax treatment as an ISA plus the benefit of income tax relief.This is because the individual is not going to be taking any taxable income, but leaving these funds IHT free to kids/grandchildren.
I though it was obvious I was referring to the tax free growth whilst invested and the tax free withdrawal(s) upon death.
It was remiss of me not to point out that death after the age after 75 would leave the beneficiaries paying their marginal rate of income tax on money they withdrew, but I wasn't going into detail, just highlighting the IHT free nature of SIPPs.
I am also not a financial adviser and have always made that very clear here, I agree there are lots of absolutely terrible ones, but there are a few good ones too.
Dromedary66 said:
Right, as a complete investment ignoramus this thread made me think I need to start doing something with a stocks and shares ISA
Had a read of this - https://www.moneysavingexpert.com/savings/stocks-s...
Anyone have good/bad experiences to share about some of the providers (nutmeg / evestor perhaps?)
I'm inclined towards medium risk funds.
Also as a contractor are there any available tricks to use Ltd company funds for investing the pre-tax cash?
I’ve only ever used HL so no experience of the others but HL have a very good online platform and app with some decent research available on the funds which I’m sure the others also have it’s probably much the same between all the different providers. Had a read of this - https://www.moneysavingexpert.com/savings/stocks-s...
Anyone have good/bad experiences to share about some of the providers (nutmeg / evestor perhaps?)
I'm inclined towards medium risk funds.
Also as a contractor are there any available tricks to use Ltd company funds for investing the pre-tax cash?
BoRED S2upid said:
Dromedary66 said:
Right, as a complete investment ignoramus this thread made me think I need to start doing something with a stocks and shares ISA
Had a read of this - https://www.moneysavingexpert.com/savings/stocks-s...
Anyone have good/bad experiences to share about some of the providers (nutmeg / evestor perhaps?)
I'm inclined towards medium risk funds.
Also as a contractor are there any available tricks to use Ltd company funds for investing the pre-tax cash?
I’ve only ever used HL so no experience of the others but HL have a very good online platform and app with some decent research available on the funds which I’m sure the others also have it’s probably much the same between all the different providers. Had a read of this - https://www.moneysavingexpert.com/savings/stocks-s...
Anyone have good/bad experiences to share about some of the providers (nutmeg / evestor perhaps?)
I'm inclined towards medium risk funds.
Also as a contractor are there any available tricks to use Ltd company funds for investing the pre-tax cash?
bhstewie said:
hstewie said: Put it in Berkshire Hathaway, keep adding, forget about it and let it compound.
(Berkshire is an example but you get the idea, forget about dividends and look at businesses that reinvest spare cash into themselves).
You'll be fking terrified when you look at the balance.
Or companies that do pay dividends which you can reinvest. Best to invest in a spread of shares/funds imo.(Berkshire is an example but you get the idea, forget about dividends and look at businesses that reinvest spare cash into themselves).
You'll be f
king terrified when you look at the balance.JulianPH said:
85Carrera said:
To claim ISAs and SIPPs are taxed the same is a fairly basic but fundamental error. This is exactly why I don’t use financial advisers; I have met with 3 in the past, asked each of them fairly basic questions which they couldn’t answer and walked away without having to pay a chunk of commission to someone offering no value.
I never stated ISAs and SIPPs were taxed the same. I said if you were using a SIPP as an IHT planning vehicle it would get exactly the same tax treatment as an ISA plus the benefit of income tax relief.This is because the individual is not going to be taking any taxable income, but leaving these funds IHT free to kids/grandchildren.
I though it was obvious I was referring to the tax free growth whilst invested and the tax free withdrawal(s) upon death.
It was remiss of me not to point out that death after the age after 75 would leave the beneficiaries paying their marginal rate of income tax on money they withdrew, but I wasn't going into detail, just highlighting the IHT free nature of SIPPs.
I am also not a financial adviser and have always made that very clear here, I agree there are lots of absolutely terrible ones, but there are a few good ones too.
You'll have to forgive me for picking up on your errors but this is important stuff that could be read by those who then act upon your suggestions.
I certainly am not making 'suggestions' on an open forum for exactly that reason. The notion of using a SIPP to reduce IHT is massively flawed and it's poor show to throw it out without proper guidance which would never be given on here.
You mentioned earlier, that this was "what you do for a living" but you say you are not a financial adviser... probably worth clarifying your expertise?
DoubleSix said:
I am a financial adviser, Chartered Wealth Manager FCSI and spent the bulk of my early career in the City as a Stockbroker.
You'll have to forgive me for picking up on your errors but this is important stuff that could be read by those who then act upon your suggestions.
I certainly am not making 'suggestions' on an open forum for exactly that reason. The notion of using a SIPP to reduce IHT is massively flawed and it's poor show to throw it out without proper guidance which would never be given on here.
You mentioned earlier, that this was "what you do for a living" but you say you are not a financial adviser... probably worth clarifying your expertise?
Your problem is that you misread what I originally said and are not prepared to admit it.You'll have to forgive me for picking up on your errors but this is important stuff that could be read by those who then act upon your suggestions.
I certainly am not making 'suggestions' on an open forum for exactly that reason. The notion of using a SIPP to reduce IHT is massively flawed and it's poor show to throw it out without proper guidance which would never be given on here.
You mentioned earlier, that this was "what you do for a living" but you say you are not a financial adviser... probably worth clarifying your expertise?
Please tell us how using an IHT exempt wrapper to reduce IHT is massively flawed?
I have no need to divulge personal information about exactly what I do. Suffice to say I am on the other side of the fence with you with an investment management provider.
Can I ask if you charge your clients an annual fee for your service. This would actually be a more useful topic for many here.
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