Where the scheme administrators have a discretion over who
they pay the death benefits (
IHTM17030) to they have the 2 year
concessionary period (
IHTM17123) in which to exercise that
discretion. If they exercise that discretion by paying the death
benefits to a private trust, that trust will be subject to the
normal IHT charges which apply to mainstream discretionary trusts.
It follows, for example, that any subsequent distributions from the
recipient trust will be chargeable to IHT even if made within the
balance of the 2 years period following the member’s death.
Where the Scheme Administrators have no discretion (such as,
where they are bound to pay the death benefits to a private
discretionary trust on the deceased's death) then the ‘two
year period’ concession transfers to the trustees of the
recipient discretionary trust. In this scenario we take the view
that the funds concerned remain comprised in a scheme to which
IHTA84/S151 applies and so do not constitute ‘relevant
property’ by virtue of IHTA84/S58 (1)(d). The recipient
trustees therefore have the benefit of the 2 year concession,
calculated from the date of the member’s death, within which
to distribute the money without any exit charge.
