I’ve been thinking a lot about how a
higher-rate taxpayer like me often gets the short-end of the stick. I’ve been
investing on Cash Isas to ensure my pensions would go to my children and wife
without much trouble, but then again I am faced with the dilemma after the UK government
has decided to abolish the death tax overall.
Death tax is when the government gets a large
cut over our pensions, a very big problem because we want our inheritors to
actually get the entire pension benefits for themselves. The abolition of the
death tax is a relief because it guarantees a 25% tax-free lump sum without any
reductions to the pensions upon death.
Now that I’ve invested in a Cash Isa, I
would consider having a pension now because now, I could withdraw before I
reach 55 years old without any reductions. For Cash Isas, I would be getting
tax free savings below £15,000. For pensions, I get everything tax free too.
It’s pretty hard to decide, but whichever
works for me is the pensions because I can wait until I’m 55. For my Isa, as
long as the Inheritance Tax does not interfere with the amount I save, I would
definitely stay with it.
