Most IHT claims will arise in personal pension plans (
IHTM17022) as the member has more say
in the scheme rules or policy conditions which are to be adopted.
In occupational schemes (
IHTM17021) the rules tend to be more
restrictive, offering less control to the member and generally the
death benefits (
IHTM17030) will be payable at the
trustees discretion (
IHTM17053) so that no IHT liability
arises. There are, however, some specific exceptions.
Where the member dies before taking his retirement benefits
(
IHTM17030) the protected rights fund
must be used to purchase benefits for a qualifying spouse, civil
partner (
IHTM11032) or other dependants. If
there is no qualifying spouse/civil partner or other dependants
then the cash value of the protected rights may be payable to
nominated beneficiaries or to the member’s estate. It follows
that if no beneficiaries have been nominated the cash value may be
paid to the estate as of right (
IHTM17052) and so be liable to IHT. The
position depends on the exact terms of the scheme rules. The
parties should give details on the form IHT409 (
IHTM10035) and where appropriate
include the sum in box 7.
