Pensions: IHT charges: lifetime transfers of death benefits
Lifetime transfers of death benefits can occur when a pension scheme member changes or transfers pension rights at a time when they are in ill-health, whatever their reason is for doing so. This can happen when:
- a member assigns their death benefits to a trust (IHTM17071)
- a member transfers their pension fund from one scheme to another (IHTM17072)
Where the transferor is in good health and is likely to take their pension benefits at some later date, then the death benefits have only a nominal value. In general, where transfers are made more than 2 years before a death you can assume that the member was in normal health, unless there is evidence to the contrary. In that case there is no transfer of value.
There may be lifetime transfers to consider even where an estate is spouse or civil partner exempt.
All cases involving potential lifetime transfers should be referred to Technical, once you have established the facts. The loss to the estate is calculated by the Board’s Actuarial Officer.