IHTM17141 - Pensions: stakeholder pensions

Any questions regarding Stakeholder Pensions should be referred to the Pension Specialist in TG at IHT Edinburgh.

The Inheritance Tax treatment of Stakeholder Pensions is broadly in line with that for other personal pensions and possible claims to IHT arise

• if the death benefits are paid ( IHTM17052) to the member’s personal representatives on death
• if the member assigns ( IHTM17071) the death benefits
• if the member has a general power ( IHTM17081) of disposal of the death benefits
• if they defer ( IHTM17091) taking the retirement benefits
• under the Income Drawdown ( IHTM17101) provisions

Where a parent or grandparent etc contributes to a Stakeholder Pension for a child or grandchild the contributions are regarded as lifetime transfers ( IHTM14000) (albeit potentially exempt ( IHTM14024)) for IHT purposes and should be included on form IHT403 ( IHTM10035) in the IHT400 ( IHTM10021).

The maximum contribution is £3600 per annum for each child/grandchild and the transfer would be £2808 (the £3600 net of basic income tax relief). Annual exemptions ( IHTM14141) and normal out of income ( IHTM14231) exemption may apply to the payments.