IHTM17153 - Divorce or dissolved civil
partnership and pensions: pension earmarking where death benefit is
not held on discretionary trusts
When the earmarking (
IHTM17151) scheme is not set up under a
Discretionary Trust (in cases where the lump sum death benefit (
IHTM17030) is payable as of right to
the deceased’s personal representatives (
IHTM05012)) the IHT position is as
follows
- when the Court issues the attachment order
against the lump sum death benefit there are normally no IHT
consequences because of IHTA84/S10 - because the Court is imposing
the order this is not a disposition (
IHTM04023) by the member intended (
IHTM04161) to confer gratuitous
benefit
- where the effect of the court order is to
confer an interest in possession (
IHTM16061) in the ex-spouse or civil
partner (
IHTM11032) then again when the death
benefit becomes payable to the ex-spouse or civil partner no claim
to IHT arises - this is an enlargement (
IHTM16092) of an interest in possession
IHTA84/S53 (2)
- any part of the lump sum payable to the
deceased’s personal representatives is subject to IHT on the
deceased’s death
