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HMRC internal manual

Inheritance Tax Manual

Pensions: IHT charges: contributions to another person’s pension scheme

There may be a transfer of value if a contribution is made to a pension scheme which provides or will provide benefits for people other than the transferor. It is effectively a lifetime gift and will be exempt or chargeable in the same way as any other gift (IHTM14001). In particular such a contribution is often not chargeable for the following reasons:

  • it is an exempt transfer if the pension scheme is for the benefit of the spouse or civil partner of the transferor (IHTM11031).
  • it is an exempt transfer if it falls within the normal expenditure out of income exemption in IHTA84/S21 (IHTM14231).
  • it is excluded from being a transfer of value (IHTM17035) if it is a contribution by an employer in respect of an employee under