When Jade Lim first arrived in the UK from Singapore, she had just £60. But through decades of prudence, thrift and sacrifice, she built up modest assets for herself and her family.
So when she was suddenly diagnosed with terminal lung cancer, her first thoughts were for her daughters, as not only does she know they and their families need the money they would inherit, she is terrified at the prospect of them having to deal with inheritance tax (IHT) at a time of mourning.
Jade, who lives in Derbyshire and has two daughters, aged 37 and 33, and three grandchildren, told The i Paper: “Instead of focusing on my health and making the most of the time I have left, I find myself consumed by anxiety about IHT, the so-called death tax.
“It is a cruel levy, imposed at a time when families are trying to cope with grief and loss.
“I worry deeply about my eldest daughter having to navigate the complexities of probate while mourning. I worry about my daughters being forced to sell assets quickly to meet a tax bill that needs to be paid within six months, after which interest will be charged.
“Both my daughters have young children, demanding jobs and no experience in handling property sales or complex estate administration. The pressure on them will be immense.”
Jade described how she was suddenly diagnosed with lung cancer two-and-a-half years ago after suffering a cough for over six months. She initially dismissed it as being caused by something like an allergy, but after it persisted, she went to see her GP.
“The GP must have suspected something as he referred me for an X-ray straight away. It all happened very quickly and I had a biopsy and was told it was Stage 4 lung cancer.”
Stage 4 lung cancer is considered terminal because it has spread to organs and is not curable. However, it is treatable and modern therapies can extend life by months or years for many people.
Jade was initially given a prognosis of two months to nine months without treatment. However, she is managing her condition by having targeted chemotherapy and the medication is working for her so far.
Jade explained that she was quite stoic about the shock diagnosis, and her worries turned more towards her daughters.
“I realise that life comes to an end for everybody, so I was quite accepting of the diagnosis,” she said. “But my daughters were very upset.
“I felt glad that I had been given notice so at least I can plan my affairs. That is when I found out about the impact of IHT and it really got me in a state.
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“I was more upset about the tax than I was about my diagnosis.”
Jade believes inheritance tax is unfair and cruel and says her stressing and worrying was caused after realising pension savings will be dragged into inheritance tax from 6 April 2027.
The changes, which were announced in the autumn Budget 2024, mean that if Jade lives past that date, she knows all her hard-saved pension pot will be subjected to 40 per cent IHT.
Jade says one of the things that frustrates her most is that it is stated that only the richest four per cent of families pay IHT – but she says she is definitely not that and would never even describe herself as wealthy.
“I have been working my whole life, but my salary has never been more than £20,000 and I have never been a high earner,” she said.
Jade came to the UK from Singapore in 1986 to stay with her then-boyfriend, who later became her husband.
“I got a job and I saved up a lot and I managed to buy a little flat in Cheltenham because I was studying for a Masters at the college nearby,” she explained.
“I was doing quite a few jobs. Sometimes, I worked at a weekend school teaching Mandarin. I also worked at a college and helped out at a homework club and gave tuition to some children.
“After my studies, I started letting out the flat I had bought in Cheltenham and that flat is a basis of my investments and has helped me a lot as I am still getting an income from it as a landlord.”
Jade has been divorced for over 15 years and as a single person, her IHT allowance is a lot lower than that of a married couple.
At the moment, the IHT nil band rate, which is the threshold up to which an estate pays zero per cent IHT, is fixed at £325,000 per person until April 2028.
On top of this, there is a residence nil rate band of £175,000, which applies if a home is being left to direct descendants like children or grandchildren. So Jade’s estate will have a potential allowance of £500,000 before IHT is applied.
Jade said: “I live in a two-bedroom bungalow and as I had lived in London before, I was able to buy this place without any mortgage. It is probably worth around £350,000.
“My one-bedroom flat in Cheltenham is probably worth around £150,000. So the two properties would take my estate to the inheritance tax allowance.
“I have savings of around £50,000 so I thought I would only go over the threshold by a small amount and thought at least my pension would be protected.
“But now, because of the changes that the Government has made which will come in next year, if I survive past April 2027, then 40 per cent will be taken off that pension pot which I have been saving for all my life.”
Jade set up a personal pension pot around 30 years ago and has been putting money into it every year.
With her contributions and growth, that pot is now worth around £170,000. With the IHT rules as they stand, she anticipates her unused pension and her savings will all be subject to the hefty tax for her daughters to contend with.
“It is just so upsetting,” said Jade. “That is my hard earned money that I worked including evenings and weekends to get.
“My wish for my money to be left to my children after my death. But now the Government is going to take a big chunk of it away and in the process, my daughters will have to go through the difficult procedure during a period of mourning.
“It is very difficult to take over someone else’s financial affairs and understand things.
“It is like a tax on me, but I won’t be able to help them. If I could handle it myself, that would be better, but the thought of my loved ones having to go through this after I am gone upsets me.
“I wanted the money for my family as they need it as it is not easy for young families today, especially with children. I know they would put it to good use and I don’t want it to go to the Government which is wasting money on things so senselessly.”
At the age of 65, she still has two years to wait until she will be eligible to claim her state pension – and she knows she might not live long enough to see a penny of her state pension.
She is currently living on a small teaching pension of around £200 a month that she receives after her time working at a college, as well as the rental income from her flat and drawing down from her personal pension.
Jade said: “The proposal to include personal pensions within inheritance tax calculations will penalise responsible, hard-working, self-employed people like me who have diligently saved for retirement without the benefit of generous employer pension schemes.
“Apart from being cruel, IHT is unjust as it taxes assets that have already been taxed throughout the deceased’s lifetime of working and saving.
“At the very least, it requires meaningful reform. Better still, it should be abolished altogether so families can focus on what truly matters at the end of life.”
She added: “Even though I know my condition is terminal, at least I can try to plan my affairs and try to go through my bucket list and make memories with my family.”
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