This article will cover:
- Inheritance Tax on Pensions – How the UK Budget 2024 affects pension assets passed to beneficiaries.
- Fixed Inheritance Tax Thresholds – How frozen nil-rate bands until 2030 will increase taxable estates.
- Why Portugal’s Golden Visa is the Best Plan B – How this program offers a tax-efficient residency option for investors.
- VIDA’s Role in Supporting Investors – How VIDA provides secure, tax-efficient investment solutions.
Introduction: Why a Plan B is Essential?
The UK Budget 2024 introduces a significant inheritance tax (IHT) charge on pensions, directly impacting how retirees pass on wealth. Starting April 6, 2027, unused pensions will be subject to a 40% inheritance tax, significantly reducing what beneficiaries receive (Gov.uk).
With higher tax burdens and rising living costs in the UK, more investors are seeking a financial escape plan. Portugal’s Golden Visa program offers a secure, tax-efficient solution, providing EU residency, financial security, and a clear pathway to citizenship.
At VIDA, we help investors secure their future by aligning their financial planning with Portugal’s Golden Visa.
UK Budget 2024: Inheritance Tax on Pensions
1. Pensions Now Subject to Inheritance Tax
From April 6, 2027, unused pension funds will be taxed before passing to beneficiaries. Previously, if someone died before age 75, pensions were inherited tax-free. Now, they will face a 40% inheritance tax before reaching family members (Gov.uk).
2. Pension Providers Will Deduct IHT Before Payouts
Pension administrators must calculate and deduct inheritance tax before releasing funds to beneficiaries. This reduces the amount families receive, requiring careful financial planning.
3. Frozen Inheritance Tax Thresholds Until 2030
The nil-rate band (£325,000) and residence nil-rate band (£175,000) remain unchanged until 2030. As pension values rise, more estates will become taxable, increasing inheritance tax burdens on families.
Why Portugal’s Golden Visa is the Best Plan B?
As UK tax burdens grow, Portugal offers a more favorable financial environment.
Here’s why:
1. No Inheritance Tax on Direct Family
Unlike the UK, Portugal does not impose inheritance tax on spouses, children, or parents. This allows families to transfer wealth tax-free, avoiding the 40% tax on pensions in the UK.
2. Residency Through Investment: A Smart Financial Move
Portugal’s Golden Visa program provides investors with EU residency and long-term financial security. By investing €500,000 in a government-regulated fund, applicants gain:
- Residency for the Whole Family: Extend benefits to spouses, children, parents, and in-laws.
- Visa-Free Travel: Access 27 Schengen countries with ease.
- Pathway to Citizenship: Apply for a Portuguese passport after five years after the investment.
With minimal residency requirements (just 14 days every two years), investors maintain their global lifestyle while securing a Plan B in Europe.
3. Lower Cost of Living and Tax Benefits
Portugal’s cost of living is significantly lower than the UK while offering:
- No wealth tax or inheritance tax for direct family members.
- Lower property prices compared to the UK.
VIDA: Securing Your Wealth in a Tax-Friendly Country
At VIDA, we specialize in sustainable and high-impact investment solutions designed to create long-term value. With evolving financial landscapes, strategic investment planning has never been more important.
How VIDA Supports Investors?
- Tax-efficient investment opportunities are designed to help investors secure their financial future.
- A focus on responsible investments that align profit with positive impact.
- Regulated, high-return investments that offer stability while protecting wealth.
With Portugal offering a secure and dynamic environment for investors, VIDA is committed to helping you explore opportunities that align with your long-term goals.
Conclusion: The Time to Plan is Now
The UK Budget 2024 significantly impacts inheritance tax on pensions, making early planning essential. While UK taxation increases, Portugal offers a stable, tax-friendly environment for investors looking to protect their wealth.
By adjusting financial strategies, exploring tax-efficient investments, and considering residency in Portugal, individuals can reduce tax liabilities and preserve assets for future generations.
At VIDA, we help investors navigate these financial changes with confidence. Contact us today to explore how Portugal’s investment and residency opportunities can secure your wealth for the future.
