Pensions

[Chie]

On 8/17/2022 at 3:54 PM, mad_manx said:

I am very bullish on crypto as many of you know.. I would recommend putting a small % into bitcoin or eth every month ..

Obviously most of the savings should be in real world assets as crypto is very risky.

So far my 10 year crypto journey has paid off very well . I don't have a work pension but have paid off my mortgage and don't have any debts and have reasonable savings.  My crypto returns more than pay off my monthly  expenses ( I live a simple life anyay. No fancy house or  posh car ) .

So while I  do  some real world work when I want to I've managed to retire around 25 years early 🙃 

Lend us a tenner?

[Tberry]

around 10–15 years ago. Your pension can be left to anybody you choose when you pass away, but it is now subject to a 7.5% tax, which is basically inheritance tax.

 

[mad_manx]

1 hour ago, Tberry said:

around 10–15 years ago. Your pension can be left to anybody you choose when you pass away, but it is now subject to a 7.5% tax, which is basically inheritance tax.

 

Is this the same in the IOM ? 

[John Wright]

1 hour ago, Tberry said:

around 10–15 years ago. Your pension can be left to anybody you choose when you pass away, but it is now subject to a 7.5% tax, which is basically inheritance tax.

 

Except it’s not. Your pension in a SIPP is capitalised rolled up saved tax free income. You get 35% tax free lump sum out and thereafter it’s taxed as income, even though in part it’s repayment of capital.

Of course not everyone pays tax at 20% because of personal allowances. So the 7.5% is an approximation.

You can wind up a SIPP but you pay back the tax relief. You can withdraw all the value of your CS or PS pension, if you are terminally ill and have time limited life expectancy, but you pay 7.5%.

Its not inheritance tax.

[Rebel1]

I'm beginning to plan for the future and am considering establishing a personal pension plan. I had hoped to locate one close by, but I haven't had any luck. Do they exist? Or can you suggest any businesses that I should look into and that welcome IOM residents?

[jackwhite]

1 hour ago, Rebel1 said:

I'm beginning to plan for the future and am considering establishing a personal pension plan. I had hoped to locate one close by, but I haven't had any luck. Do they exist? Or can you suggest any businesses that I should look into and that welcome IOM residents?

Not sure if there's anything I'm not picking up on but most financial advisors should be able t do this, no? 

Personally I'd recommend LMS Partners.

[The Phantom]

2 hours ago, Rebel1 said:

I'm beginning to plan for the future and am considering establishing a personal pension plan. I had hoped to locate one close by, but I haven't had any luck. Do they exist? Or can you suggest any businesses that I should look into and that welcome IOM residents?

Do you mean a SIPP where you realistically choose the investments rather than an FA?

[The Voice of Reason]

On 8/13/2022 at 1:13 PM, VikingRaider said:

Really ?

Exactly when did Manx Inheritance Tax come into force ?

I really don’t understand the resistance to inheritance tax. The government has to collect taxes for the services they have to fund. I think I have said before I would rather pay such taxes when I’m dead rather than when I’m alive. Seems a better deal to me.

All this talk of “I’ve worked hard all my life to gain my wealth. Why should the government take it when I’m dead, why shouldn’t I pass in on intact to my beneficiaries” ?

Well yes, well done for accumulating wealth during your lifetime through hard work. That is commendable.  ( less so if it has come about through good fortune)

But in the main, the persons who benefit from such legacies have not contributed to it. 

There are of course arguments for a partner/ spouse  who has sacrificed their career to further family income , but usually that is a decision based on household economics and as such does not preclude from being taken into account for the taxation equation.
It certainly doesn’t apply to feckless offspring who have contributed nothing to the creation of such wealth but have already enjoyed the benefits of it. So who are they to complain if a percentage is skimmed off for the greater good? Paying towards the NHS, police force, social welfare etc etc

[mad_manx]

57 minutes ago, The Voice of Reason said:

I really don’t understand the resistance to inheritance tax. The government has to collect taxes for the services they have to fund. I think I have said before I would rather pay such taxes when I’m dead rather than when I’m alive. Seems a better deal to me.

All this talk of “I’ve worked hard all my life to gain my wealth. Why should the government take it when I’m dead, why shouldn’t I pass in on intact to my beneficiaries” ?

Well yes, well done for accumulating wealth during your lifetime through hard work. That is commendable.  ( less so if it has come about through good fortune)

But in the main, the persons who benefit from such legacies have not contributed to it. 

There are of course arguments for a partner/ spouse  who has sacrificed their career to further family income , but usually that is a decision based on household economics and as such does not preclude from being taken into account for the taxation equation.
It certainly doesn’t apply to feckless offspring who have contributed nothing to the creation of such wealth but have already enjoyed the benefits of it. So who are they to complain if a percentage is skimmed off for the greater good? Paying towards the NHS, police force, social welfare etc etc

One issue I have with inheritance tax is that it is  a double taxation.

For example if it is  savings in the bank it has had tax paid already. 

[The Voice of Reason]

10 minutes ago, mad_manx said:

One issue I have with inheritance tax is that it is  a double taxation.

For example if it is  savings in the bank it has had tax paid already. 

Well yes but not enough tax paid already (assuming the government has got its sums right which we have to do for the sake of the argument. ( I know)

Youre not paying tax on your savings you are paying tax on the interest it earns.

So let’s say par example rather than you paying income tax at 30% on the interest  ( a figure the Govt reckons they need to collect to keep public finances in order)  you are charged 20% and the difference is made up on in a capital tax when you die .

Thats a crude calculation but it’s how it works. Paying tax is ( or shouldn’t be)optional when you’re alive. Why should it be when you’re dead?

 

[Passing Time]

1 hour ago, The Voice of Reason said:

I really don’t understand the resistance to inheritance tax. The government has to collect taxes for the services they have to fund. I think I have said before I would rather pay such taxes when I’m dead rather than when I’m alive. Seems a better deal to me.

All this talk of “I’ve worked hard all my life to gain my wealth. Why should the government take it when I’m dead, why shouldn’t I pass in on intact to my beneficiaries” ?

Well yes, well done for accumulating wealth during your lifetime through hard work. That is commendable.  ( less so if it has come about through good fortune)

But in the main, the persons who benefit from such legacies have not contributed to it. 

There are of course arguments for a partner/ spouse  who has sacrificed their career to further family income , but usually that is a decision based on household economics and as such does not preclude from being taken into account for the taxation equation.
It certainly doesn’t apply to feckless offspring who have contributed nothing to the creation of such wealth but have already enjoyed the benefits of it. So who are they to complain if a percentage is skimmed off for the greater good? Paying towards the NHS, police force, social welfare etc etc

Stop talking shite. Chances are is that those savings have already been taxed. The government have no right to try and tax them again.

[The Voice of Reason]

29 minutes ago, Passing Time said:

Stop talking shite. Chances are is that those savings have already been taxed. The government have no right to try and tax them again.

I don’t think you’ve understood what I said. Nor do you understand the difference between income and capital taxes.

And there’s certainly no excuse  for such an aggressive response

[mad_manx]

12 hours ago, The Voice of Reason said:

Well yes but not enough tax paid already (assuming the government has got its sums right which we have to do for the sake of the argument. ( I know)

Youre not paying tax on your savings you are paying tax on the interest it earns.

So let’s say par example rather than you paying income tax at 30% on the interest  ( a figure the Govt reckons they need to collect to keep public finances in order)  you are charged 20% and the difference is made up on in a capital tax when you die .

Thats a crude calculation but it’s how it works. Paying tax is ( or shouldn’t be)optional when you’re alive. Why should it be when you’re dead?

 

Interest income is not tax free in the IOM and everyone has to pay tax on interest earned..I have been paying tax on the Interest earned on my savings all my life. When my missus/ kids inherit it they will also have to pay tax on the Interest earned 

So what's the issue then? 

The NI (This is not ring fenced for your state pension and the government is free to spend it for what it wants) is another stealth tax most of us pay all our working lives..

At the end of the day most of us work  the first 10 days of every month to pay tax .. I don't know how much more we need to pay.. 

 

Edited November 24, 2022 by mad_manx

[wrighty]

On 11/23/2022 at 9:24 PM, The Voice of Reason said:

I really don’t understand the resistance to inheritance tax. The government has to collect taxes for the services they have to fund. I think I have said before I would rather pay such taxes when I’m dead rather than when I’m alive. Seems a better deal to me.

All this talk of “I’ve worked hard all my life to gain my wealth. Why should the government take it when I’m dead, why shouldn’t I pass in on intact to my beneficiaries” ?

Well yes, well done for accumulating wealth during your lifetime through hard work. That is commendable.  ( less so if it has come about through good fortune)

But in the main, the persons who benefit from such legacies have not contributed to it. 

There are of course arguments for a partner/ spouse  who has sacrificed their career to further family income , but usually that is a decision based on household economics and as such does not preclude from being taken into account for the taxation equation.
It certainly doesn’t apply to feckless offspring who have contributed nothing to the creation of such wealth but have already enjoyed the benefits of it. So who are they to complain if a percentage is skimmed off for the greater good? Paying towards the NHS, police force, social welfare etc etc

A very reasonable argument, and I too don't understand the resistance or aggressive counter-arguments.  Having said that I do think there should be some allowance for property inheritance, perhaps tax is only due once the property is sold? Currently, IHT has to be paid before a probate order can be granted (this is in the UK), which can mean property has to be sold etc, even if beneficiaries don't really want to.  There ought to be a better way, perhaps paying tax initially on more liquid assets that are part of the estate, rather than the whole lot.

[Tioni]

From someone who has spent more than 40 years in the financial industry, your advise is sound. I would also suggest purchasing a significant number of Krugerrands or sovereigns as a backup. They will soar when inflation starts.

Edited November 28, 2022 by Tioni