Unapproved pension or retirement benefit schemes do not have to
adopt any particular form. There are no tax regulations which
govern the structure of the schemes, the types of benefits or their
amount. These are all matters for employers, employees and their
advisors to decide within the context of general law.
If an employer elects to provide benefits under an
unapproved scheme he has the option of doing so through a FURBS
(funded unapproved retirement benefit scheme) or a UURBS (unfunded
unapproved retirement benefit scheme). In the former the employer
contributes to the scheme whilst in the latter a contractual
promise is usually made to top up benefits to the level they would
have been on retirement or death if the earnings cap restrictions
did not exist.
Where the deceased was a member of an unapproved scheme at their
death the parties should answer the questions in the form IHT409 (
IHTM10035) in the normal way and give
details on pages 15 and 16 of the IHT400 (
IHTM10045) of the benefits payable
under the scheme and the benefits taken by the deceased.
For some specific aspects of the Inheritance Tax treatment
of unapproved schemes see
IHTM17073 and
IHTM17122.
