A letter in the FT responding to my thoughts on replacing inheritance tax (IHT) with an income tax on the recipients has what looks like rather a good idea in it. Why not allow pension pots to be transferred free of inheritance tax, says reader Roy Watson.
When the benefits from the pots were withdrawn, they would then (obviously) be taxed at the marginal income tax rate of the recipient. This would allow today's well-off baby boomers to help the younger generation, but also leave pension money invested "for the benefit of the economy" for longer than would otherwise be the case.
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