These are products designed to top up occupational pension
schemes (
IHTM17021). They are called additional
voluntary contributions (AVCs) when run by the employer and free
standing additional voluntary contributions (FSAVCs) where the
member takes out an individual plan with a financial institution
such as a life office, building society or unit trust group. All
benefits under a FSAVC must be paid as pension rather than a lump
sum benefit. As pension entitlement cannot be assigned it is not
possible to put FSAVCs in trust.
Where the member dies having deferred taking benefits under
an AVC or FSAVC scheme the funds may be used to provide pension for
the widow/widower/surviving civil partner/dependant or returned to
the late member’s personal representatives (
IHTM05012) less tax under ICTA88/S599A
. Where the refunded surplus is payable to the deceased’s
estate as of right (
IHTM17052) then it will be liable to
IHT. Where that surplus is subject to income tax it is the net
figure which should be included on the IHT409.
