PSI17.2.55 - Tax Treatment of Approved Schemes
and Payments by Approved Schemes: Taxation of Payments to Scheme
Members - Inheritance Tax - Contributions by Employers
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(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
Section 12 Inheritance Tax Act 1984 exempts from IHT
contributions paid by an employer to a pension scheme by saying
that they are not to be treated as transfers of value if:
- the contribution is paid to an approved
retirement benefits scheme providing retirement benefits to an
employee for his or her service, or
- the retirement and death benefits provided
for an employee (or after his/her death for his/her widow, widower
or dependants) are comparable to those which could be provided
through an approved scheme. Provision for an employee partly
through an approved scheme and partly otherwise is exempt only if
the total benefits are within the normally approvable limits.
The exemption does not apply if the employee and employer are
‘connected’ persons (broadly spouses of relatives).
Do not become involved in correspondence with practitioners
about section 12 and let Technical Support Section see any
enquiries from CTO about cases within sub- paragraph b. above.
Contact: | Date issued: | Next review:
