There was a large jump in tax receipts for HMRC in June 2022, notably for inheritance tax which amounted to £726m and taking the last 12 months to a whopping £6.3bn… SIX BILLION… That’s £6,348,000,000 paid to HMRC in inheritance tax in the last 12 months.

To provide some context, just 10 years earlier the tax year 2010/11 amounted to a total of £2.9bn. Naturally part of this is due to the rising value of assets, notably your home – which is often the most valuable asset that has to be included for Probate. Do you really want to leave 40% of your home to the Chancellor?

You may remember George Osborne (then Chancellor). He attempted to deal with this by introducing the main residence relief, providing £175,000 of additional exemptions for those with children to inherit your home. As ever, when left to politicians, the substance of the allowance was poorly thought through (unless you suspect policy is more to do with votes) and can be taken away for those with estates worth more than £2m. Coincidentally, the Summer Budget 2015 was 7 years ago, which may help provide some sense of perspective in terms of using the “7 year rule”). In simple terms if you give assets/money and live for 7 years, it isn’t counted as part of the estate should you die after 7 years. That is sadly not always true and depends on many variables.

As for some further context, the price of a small 3-bed terraced house in Edna Road, SW20 (where our office is currently located) is a now around £800,000- £980,000. Back in 2015 they were selling for £620,000-£665,000. Yes it is mad. Naturally the sums of Stamp Duty tax have also risen too (£14bn in 2021/22).

Don't Tip HMRC


From a planning perspective, leaving an estate with a high balance tells me several things – either you are very wealthy, or sadly died too soon. The alternative is that you didn’t realise that you could spend or give rather more than you did, for fear of running out of money.

This is precisely what we address with good financial planning. Striking the balance between living today and planning for tomorrow. Financial planning is not really about investments, its about your values and how you wish to maintain your lifestyle and use your money wisely.


You have likely paid tax on most of the money you earned in your lifetime through income tax and national insurance. You have also paid taxes on a pay-as-you-go basis for VAT and excise duties, or stamp duty, perhaps even investment growth or if you are an NHS doctor, tax on income you have not even had yet*. Inheritance tax feels rather like the last snub from HMRC at 40% of everything above your threshold and exemptions.

I’m guessing you wonder where it all goes and whether you are getting fair taxes. Tax evasion (not paying due taxes) is illegal, but tax avoidance (using the allowances and options available as set out by Government and HMRC) means you can take some back or at least minimise how much you pay.

Tax planning is a significant and much undervalued aspect of what we do here. Whilst many in regulation and media focus on charges and volatile markets, few seem to be bothered about tax rates north of 40%, 45%, 55% and 60% that are all very much alive.

Inheritance tax is a bit like leaving HMRC a very hefty tip after a lifetime of taxes. So talk to us about how to minimise, avoid or mitigate inheritance tax (or any other tax).

* Annual Allowance tax charge and tapered annual allowance for pensions is the main reason why many doctors are reducing hours within the NHS or retiring early. The Annual Allowance was part of “Pension Simplification” (you must be kidding!) introduced by the Labour Government in 2004 and implemented from April 6th 2006. The Conservative Government decided to double down by introducing the tapered annual allowance in 2015, something I have been writing to various Chancellors explaining the folly and problems that would be caused. It was introduced, by guess who… dear George.



Inheritance tax makes up about 1% of taxes and penalties paid to HMRC and each year is roughly the same amount collected as from insurance premium taxes. Inheritance tax is paid by your estate, essentially taking money from your beneficiaries.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email


Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – 
Call – 020 8542 8084


Are we a good fit for you?


Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email –    Call – 020 8542 8084


Are we a good fit for you?

SIX BILLION OF INHERITANCE TAX2023-06-20T14:46:08+01:00

UK Pension rules are a post-modern farce

The state of the UK pension system, supposedly one of the best in the world, is a shambles. It is high time this Government got its act together and decided that either we should all be saving and encourage us to do so, or give up. The bureaucrats at Whitehall are the only winners in the pensions mess, with endless tinkering with the rules that are gradually constricting the life out of a system that is supposed to encourage and reward savers and employers alike.

You may recall that the last Government decided to draw a line under pension rules and adopt a new approach called “pensions simplification”. Well intended it may have been, but it has been a shambles. The current administration are just as bad. Pension simplification was meant to give everyone a maximum pension fund allowance (the lifetime allowance). Not easy when you consider that a lot of pensions are not real money – a final salary scheme, such as the NHS or Civil Service are not investment based pensions, but service based. Irrespective of what the employee contributes the end result is assured based upon a proportion of final salary. For the record, this has also been messed around with. Anyhow, these schemes were given a formula. Let’s keep it simple and suppose you have built a pension of £25,000 a year and the lump sum would be 3x times  this amount. The formula was 2ox pension + LS. in other words £575,000 in this instance. Then this needs to be checked against the lifetime allowance, originally £1.5m – so in this case fine. The problem comes if your pension is worth £65,000 a year – which is not unreasonable in 2013 for a Consultant with 40 years of NHS service. Those with more than £1.5m at A-Day (when the new rules came in on 6 April 2006) could protect their existing funds by applying for enhanced or primary protection, essentially agreeing not to pay more in.

The Lifetime allowance has been increased and then decreased and heading to £1.25m from 6 April 2014. The amount that you can contribute has also been restricted. Severe tax penalties apply for anything over the limit. In essence there is an incentive to restrict growth and payments. Don’t forget that “the other side” of retirement, when you actually take your pension, this is taxable income. Argh! yes there are new levels of protection too, just to meet the problems of a reducing lifetime allowance and the latest raft of rules published by HMRC are out for consultation until 2nd September. These outline two more forms of protection Individual Protection (IP14) and Fixed Protection 2014 (FP14).

All of this needs very careful advice. But just in case anyone from central or any far off field of Government is bothering to listen. Here’s a question for you. Can YOU tell me what your pension is worth today? (all of them) and can you tell me what it will be worth when you retire? can you even tell me who your pensions are with? and are you aware of the potential problems for those with “workplace pension” or “auto enrolment” for those with large pension pots? No, like most people, you attempt to understand the mass of paper that may or may not arrive each year outlining the income that you might get if XYZ does something useful with your money.

If anyone in Government had a modicum of common sense the only restriction on a pension should be the amount that can be paid in that qualifies for tax relief. That is all. Have this as a fixed percentage of income – just one level, not dozens based on your age. Make it attractive. Don’t mess with it, leave it alone. YOU will get your tax relief back anyway in the form of income tax, reduced reliance upon the state and eventually in some cases inheritance tax. Here’s my suggestion after 20+ years of dealing with pensions and handling everything from the very basic questions to the most complex. Offer tax relief of 25% at source, with no need to reclaim it. Only allow those that pay income tax to receive the tax relief and restrict the amount to 25% of taxable income (in total from employer and employee). Oh, and keep the ability to have tax free cash of 25% of the fund at retirement, but no more. It bet that in 2 days you will still be able to remember my suggested fantasy rules. As for the more complex issues – allow carry back to only the last tax year and for non earners, or non taxpayers frankly there are likely to be more pressing matters for their money and a myriad of alternative forms of saving vehicles.

I wait in anticipation of the revolution that puts investors/savers/ the UK public first…. no I am not a member of UKIP.


Dominic Thomas – Solomons IFA


UK Pension rules are a post-modern farce2013-06-18T11:04:37+01:00
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