Article by Stephen Ward, managing director of Premier Financial Solutions (UK) Ltd. This article appeared in the June 2006 issue of Tax Adviser.
One of the few certainties in life is that one day all our lives are going to end! In relation to pension arrangements, the IHT impact depends on timing. It has always been the case that in the overwhelming majority of instances the discretionary disposal of pension fund death benefits has led to the potential for IHT to be avoided.
In examining the subject of IHT and pensions, and in particular now that we are beyond 'A-Day' and the introduction of a single tax regime governing pension arrangements generally, it is necessary to look at the postion on death in three specific circumstances. Which brings us back to timing.
We need to consider whether the pension scheme member dies before or after the age of 75; and in relation to death before age 75, whether the scheme member dies before or after benefits have been taken - known, in the new language of pensions, as a benefit crystallisation event.
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June 2006 by