Taking out a pension when dying

R

rusty

Guest
Can I ask a pensions expert a simple question please ?

A friend's friend is terminally ill and it has been suggested to him that he could do the following based on the assumption that he is going to die:

- Invest in a single premium personal pension before 31 October and get tax relief based on the tax year 2003 and when he dies the wife will get the value of the fund tax free. eg invest say 30K, tax relief/refund of 13K odd, net cost 17K. On death wife receives 30K or thereabouts. There is nothing illegal in this is there ? My understaning is that there is 2 seperate transaction (i) tax relief (ii) investment with pension company.

- If above is ok, I presume he can do same again on 1st November for tax year 2004.

Also his existing pensions the same can be done. ie if death occurs his wife gets full value of the fund tax free ? He will be 60 in one months time but I cannot see why he would take his benefits as he will be taxed on pension or if he goes new route his wife will eventually be taxed.

Am i missing something obvious ? His aim is to provide as much as he can for his wife.
 
Terminally ill

If you are talking about a self employed individual you are correct.
He can invest up to 30% of income in respect of 2003 tax year and offset against final returns on Oct 31st 2004.
He could also invest 30% of 2004 earnings (estimate) and offset against preliminary tax payment paid on Oct 31st in respect of 2004 tax year.
On his death (before retiring) the value of any fund is paid to his estate tax free.
 
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