Who Wants to be a ISA Millionaire
Discussion
DoubleSix said:
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.
I understood the point you were trying to make Julian - the equivalence of the tax treatment IN a SIPP and that of being IN an ISA.I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
JulianPH said:
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.
If you are going to compare ISA and SIPP or any two products/wrappers you need to cover off the negatives, not just point out the tasty bits. e.g. "However, it's worth noting that if you later want to take an income from your SIPP you may incur tax which would not be the case with an ISA."
We've already covered the flaw in using a SIPP in the manner you suggested have we not?? Unless you can guarantee the client will be dead before 75 it makes for a pretty weak proposal when compared to say a flexible reversionary trust or indeed other options... it's a broad topic.
I agree that we are perhaps moving away from what readers might find useful, and yes of course 99% of IFAs charge an annual ongoing fee as you know.
Edited by DoubleSix on Monday 21st May 13:28
TFP said:
I understood the point you were trying to make Julian - the equivalence of the tax treatment IN a SIPP and that of being IN an ISA.
I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
It's not a revelation I'm afraid, just pretty basic stuff. I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
DoubleSix said:
TFP said:
I understood the point you were trying to make Julian - the equivalence of the tax treatment IN a SIPP and that of being IN an ISA.
I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
It's not a revelation I'm afraid, just pretty basic stuff. I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
I think you have mis-sold us.
Your claim of 'massive flaws' turned in to a single flaw.
Without wishing to turn this in to a technical exercise, you seem to be dismissing the position where death occurs post-75 where the reality is that it depends on the circumstances doesn't it ? Whilst the situation changes at this point, it seems odd that you think it can no longer be an effective wealth transfer vehicle from this point onwards.
If you're going to be so particular then shouldn't you point out that it has its place, rather than dismiss it ?
TFP said:
DoubleSix said:
TFP said:
I understood the point you were trying to make Julian - the equivalence of the tax treatment IN a SIPP and that of being IN an ISA.
I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
It's not a revelation I'm afraid, just pretty basic stuff. I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
I think you have mis-sold us.
Your claim of 'massive flaws' turned in to a single flaw.
Without wishing to turn this in to a technical exercise, you seem to be dismissing the position where death occurs post-75 where the reality is that it depends on the circumstances doesn't it ? Whilst the situation changes at this point, it seems odd that you think it can no longer be an effective wealth transfer vehicle from this point onwards.
If you're going to be so particular then shouldn't you point out that it has its place, rather than dismiss it ?
Given current life expectancies, I would suggest that this is indeed a MASSIVE FLAW in attempting to use a SIPP to mitigate IHT.
P.S. You have also chosen to pluralise my use of the word flaw, not sure why - the one is big enough!
Edited by DoubleSix on Monday 21st May 14:05
DoubleSix said:
TFP said:
DoubleSix said:
TFP said:
I understood the point you were trying to make Julian - the equivalence of the tax treatment IN a SIPP and that of being IN an ISA.
I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
It's not a revelation I'm afraid, just pretty basic stuff. I was just about to encourage you not to bite in the face of provocation, but now I too want to hear about the revelation above.
Come on Mr 66, don't tease, what are the massive flaws ?
I think you have mis-sold us.
Your claim of 'massive flaws' turned in to a single flaw.
Without wishing to turn this in to a technical exercise, you seem to be dismissing the position where death occurs post-75 where the reality is that it depends on the circumstances doesn't it ? Whilst the situation changes at this point, it seems odd that you think it can no longer be an effective wealth transfer vehicle from this point onwards.
If you're going to be so particular then shouldn't you point out that it has its place, rather than dismiss it ?
Given current life expectancies, I would suggest that this is indeed a MASSIVE FLAW in attempting to use a SIPP to mitigate IHT.
Let me spell it out to you....
As I have forced you to concede, if the beneficiary is a non-taxpayer it wouldn't be a massive flaw, would it. In fact, if the beneficiary(ies) paid tax at less than the IHT rate, it would still be a benefit, wouldn't it ?
I can see you are shuffling towards a position about only untaxed solutions, but your proposed alternatives would introduce other costs wouldn't they, so its not a binary game is it.
What you claim as a MASSIVE FLAW might effect some, but not all.
DoubleSix said:
You have it back to front. The pension fund can only pass untaxed to a beneficiary where the policy holder dies BEFORE age 75. Notwithstanding the circumstances where the beneficiary is a non-taxpayer.
Given current life expectancies, I would suggest that this is indeed a MASSIVE FLAW in attempting to use a SIPP to mitigate IHT.
Its not a massive flaw, its just depends on the situation. Given current life expectancies, I would suggest that this is indeed a MASSIVE FLAW in attempting to use a SIPP to mitigate IHT.
Withdrawal of funds by a beneficiary of the SIPP will be taxed as income if you die 75+. So you can create many scenarios whereby tax for that beneficiary will be less than the 40% incurred from IHT.
Therefore it is wise to leave the SIPP as an absolute last resort if you are in need of income or capital and burn through your ISA or taxable portfolio first.
I think thats what Julian was alluding too.....
btdk5 said:
DoubleSix said:
You have it back to front. The pension fund can only pass untaxed to a beneficiary where the policy holder dies BEFORE age 75. Notwithstanding the circumstances where the beneficiary is a non-taxpayer.
Given current life expectancies, I would suggest that this is indeed a MASSIVE FLAW in attempting to use a SIPP to mitigate IHT.
Its not a massive flaw, its just depends on the situation. Given current life expectancies, I would suggest that this is indeed a MASSIVE FLAW in attempting to use a SIPP to mitigate IHT.
Withdrawal of funds by a beneficiary of the SIPP will be taxed as income if you die 75+. So you can create many scenarios whereby tax for that beneficiary will be less than the 40% incurred from IHT.
Therefore it is wise to leave the SIPP as an absolute last resort if you are in need of income or capital and burn through your ISA or taxable portfolio first.
I think thats what Julian was alluding too.....
TFP said:
DoubleSix said:
Or you could just stop trying to use a square peg to fill a round hole and source a proper watertight solution that doesn't rely on the stars aligning just so...
Or you could just admit you were wrong..........Or maybe we'll have to wait for the stars to align.
I'm sure there are plenty of investment managers or other players in the financial sector that point to these sort of product features as benefits to their clients. It's easy and it makes them sound clever... "Yeah Jocasta, no fear, you can just give the kids your SIPP tax free yah"
However, estate planning is a specific and highly technical area, an area I'm qualified to deliver advice within, and I assure you no right-thinking financial planner is going to sign off an IHT mitigation report with a SIPP as the chosen central solution - there are just too many moving variables that could leave you on the hook.
Joscal said:
I'm confused!
If the money is put into a SIPP do the beneficiaries have to wait until they hit retirement age before they can access the funds or is it it participating members only?
Yes you have to wait until retirement age to access a SIPP those two aren’t going to answer you (without charging If the money is put into a SIPP do the beneficiaries have to wait until they hit retirement age before they can access the funds or is it it participating members only?
DoubleSix said:
TFP said:
DoubleSix said:
Or you could just stop trying to use a square peg to fill a round hole and source a proper watertight solution that doesn't rely on the stars aligning just so...
Or you could just admit you were wrong..........Or maybe we'll have to wait for the stars to align.
I'm sure there are plenty of investment managers or other players in the financial sector that point to these sort of product features as benefits to their clients. It's easy and it makes them sound clever... "Yeah Jocasta, no fear, you can just give the kids your SIPP tax free yah"
However, estate planning is a specific and highly technical area, an area I'm qualified to deliver advice within, and I assure you no right-thinking financial planner is going to sign off an IHT mitigation report with a SIPP as the chosen central solution - there are just too many moving variables that could leave you on the hook.
Are you ok ?
bad company said:
b
hstewie 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.Really I was trying to put across a point on how to maximise returns assuming everything goes as you hope v suggesting anyone literally put everything in one stock.
DoubleSix said:
I agree that we are perhaps moving away from what readers might find useful, and yes of course 99% of IFAs charge an annual ongoing fee as you know.
So what do you charge as an annual fee and what do you do for it? That would be a very interesting topic as there are many here who don't understand this. You are obviously in a position to expand, given your credentials. Edited by DoubleSix on Monday 21st May 13:28
PS Thanks to everyone saying they understood the concept of what I put forward regarding the IHT benefits of SIPPs. It was quite a simple point and was never indented to be an exhaustive report for individual circumstances. I think this topic has been exhausted now.
JulianPH said:
PS Thanks to everyone saying they understood the concept of what I put forward regarding the IHT benefits of SIPPs. It was quite a simple point and was never indented to be an exhaustive report for individual circumstances. I think this topic has been exhausted now.
Julian just to reiterate this, your posts are always illuminating, no doubting of your knowledge from me!NickCQ said:
JulianPH said:
PS Thanks to everyone saying they understood the concept of what I put forward regarding the IHT benefits of SIPPs. It was quite a simple point and was never indented to be an exhaustive report for individual circumstances. I think this topic has been exhausted now.
Julian just to reiterate this, your posts are always illuminating, no doubting of your knowledge from me!It will be interesting to hear what our highly qualified financial adviser charges - and provides in return - for their fees. I will not be holding my breath!
Edited for typo
Edited by JulianPH on Tuesday 22 May 19:43
DoubleSix said:
No, I definitely wouldn’t Julian.
On the basis that you haven’t shown any openess regarding your own experience I shall not be rushing to answer your questions. Adieu.
I thought so. On the basis that you haven’t shown any openess regarding your own experience I shall not be rushing to answer your questions. Adieu.
I do not proclaim myself to be a financial adviser (as I am not and would not ever want to be one). You, however, do.
Yet you won't explain (in the slightest) what you you do to justify your fees.
You wonder why people do not trust financial advisers or and their fees for advice...?
You have an open platform here, yet asked once what you actually do for your fees you say "I definitely wouldn't".
If I were you I would take this as an opportunity. My 'experience' is completely irrelevant here. You are the financial adviser.
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