(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)
Contributions paid by an employee to a retirement benefits
scheme either directly or by a salary sacrifice are not a
“transfer of value”. Nor is the provision of benefits
for the widow, widower or dependant, whether in their own right or
by allocation of part of the member’s benefits, if the main
object of the scheme is to provide for the member’s own
retirement (member in this case can also include an ex-spouse
member). Where an approved scheme provides benefits solely for
widows, widower and dependants, IHT may be payable if the
beneficiary is a dependant other than the surviving spouse. Refer
any enquiries on this point to IR (Capital Taxes). Also the
splitting of pension rights in accordance with the pension sharing
on divorce provisions in the Welfare Reform and Pensions Act 1999
(see
PSI3.5.4) should not be a
“transfer of value” but, again, refer any enquiries on
this point to IR (Capital Taxes).
