Pensions: relevant property charges: introduction
Most pension arrangements are written in trust and are settlements for Inheritance Tax purposes. As such, the pension fund is relevant property unless specifically excluded, so it is subject to the normal 10 year anniversary and proportionate (exit) charges (IHTM04096).
IHTA1984/S58(1)(d) excludes property held for the purposes of:
- a registered pension scheme (IHTM17021),
- a qualifying non-UK pension scheme (IHTM17025) and
- a section 615(3) scheme (IHTM17026)
from the definition of relevant property. So such trust based schemes are not liable to the 10 year anniversary or exit charges (IHTM17038). A sponsored superannuation scheme that was established before 6 April 2006 may also be excluded, either wholly or partly (IHTM17039).
Other trust based schemes that provide retirement benefits (primarily employer-financed retirement benefit schemes (EFRBS)) (IHTM17027) that were:
- established on or after 6 April 2006 or
- where additional contributions are made to an existing scheme on or after that date,
are relevant property trusts.
If further contributions were made to a sponsored superannuation scheme on or after 6 April 2006, there are provisions that apportion the total fund between the pre 6 April 2006 ‘protected’ fund and the post 6 April 2006 relevant property fund. (IHTM17039).
If there is any reference to an EFRBS (or FURBS) in the form IHT400 you should refer the file to Technical.
A trust that is set up to receive death benefits is a relevant property trust (IHTM17073).