FINANCIAL MATTERS - OCTOBER

FINANCIAL MATTERS - OCTOBER

Providing clarity

This month’s Technical Bulletin explores the complex rules surrounding pension transfers and inheritance tax (IHT) charges. If a seriously ill person transfers a pension plan and dies soon after, IHT may apply. Meanwhile, if a member of a pension scheme aged 75 or over dies and a lump sum is paid to a personal discretionary or flexible trust, a 45% special lump sum death benefit charge arises. This raises various questions, including how to reclaim the 45% tax deduction and how payment made to a beneficiary is attributed to the original payment from the scheme administrator to the trustees.

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