"HMRC asked me to pay IHT on my mother’s Isa cash": Moneywise readers' best comments and letters

Published by The Moneywise Team on 13 February 2019.
Last updated on 13 February 2019

Inheritance tax review ordered by the government


Each month we publish the best comments, emails and letters from our readers the star of which will win a £50 M&S giftcard. Here are the best of January 2018

A brilliant goal for married life together

Each month I anticipate Moneywise dropping on to my doormat. I scan with much excitement any tips or advice that will enable me to save money, however small.

Reading the article on Weird and Wonderful Budgeting Tips (January 2019), I came across the marvellous idea of saving money on a daily basis over one year, until the total savings are a whopping £667.95 [Save 1p on day one 2p on day two and increase by 1p every day throughout the year.]

My fiancée is learning to budget and has taken up this idea. We each are saving the recommended cash, aiming for more than £1,300 a year by this weird and wonderful budgeting tip. This will be helpful as we are getting married on the 20 December 2019 and are planning a low-cost wedding with the reception costing £1,300.

What a wonderful idea, not only will this help towards our goal, but together we plan to save and engrain some homegrown financial practices – courtesy of Moneywise.

SB/via email

Keeping Isa statements saved us thousands

Patrick Connolly suggested (Ask the Experts, December 2018 issue) that Isa statements need not be kept for tax purposes, but our own experience has proved otherwise.

My mother used her tax-free gift allowance each year and told HMRC she would use her income to contribute regularly to her grandchildren’s school fees. She was still doing both 14 years later when she died.

During her last seven years, the taxable income HMRC knew about only covered her own living expenditure and inheritance tax (IHT) was due on her estate.

HMRC wanted us to pay IHT on the fee money too. Because she had kept her Isa statements, we could prove that all fee money was paid from non-taxable income. HMRC backed down and we saved thousands of pounds.

DP/via email

Moneywise says: This is a great example of a reader able to save money through careful book-keeping. Mr Connolly says that keeping this information is useful in “exceptional circumstances” and we think this fits the description well.

Plastic bag charge to double to from 5p to 10p

Doubling the plastic shopping bag charge may reduce use if plastic bags were made of reinforced plastic to reduce tearing. Food packaging should be improved as vac packs often have hard, sharp corners that cut through plastic bags, while plastic egg boxes should be improved, as they do the same damage, or we should go back to the cardboard egg boxes.

Government ministers don’t understand these things or they would have sorted it out before now to make plastic bags last longer in order to cut the amount of plastic used. Although woven material bags are better, a plastic one is best for grocery items that could leak.

CX/via comments

I would suggest that supermarkets replace plastic bags for self-selection of fruit and vegetables with recyclable paper bags.

DK/via comments

Will grocery and butchers also be charging? Why are goods not put into recyclable paper bags?

SC/via comments

Moneywise says: The new charge will indeed affect all small businesses. Supermarkets, such as Morrisons, have begun reintroducing paper bags for loose produce in order to lower plastic usage. But our reader, CX, is also not impressed by the supermarket giant’s efforts.

Morrisons has started using flimsy paper bags with a clear window, which struggle to make it through the till without falling apart.

Brown paper bags are stronger, but the till operator has to look in the bag to see what is inside. Everything pre-packed is the biggest waste.

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Deferring the State Retirement Pension.

You recently answered a query about the additional payments by which the SRP increases when it is deferred. Below the reply is a red box setting out the rules that apply. What may not be known is that if you don't claim the pension and are automatically deferred, there is a hidden catch should you be unfortunate enough to die before reaching your intended (deferred) date of retirement. In these circumstances only 12 weeks of unclaimed pension will be paid into the Estate, the rest is lost. I think this needs as much publicity as the information about how to defer.