IHTM17350 - Pensions: alternatively secured pensions: introduction

Changes to pension scheme rules from 6 April 2006 introduced a new way of accessing a pension for those who did not want to take out an annuity at age 75. The alternatively secured pension (ASP) allowed the member to draw funds from their ASP fund, but with limits designed to prevent the fund being exhausted in the member’s lifetime. Inevitably, this meant that funds would be left over when the member died. In extreme cases, with minimum withdrawals, a substantial pension fund could be built up that could be passed on to beneficiaries.

Because of this possibility, specific Inheritance Tax charges relating to ASPs were introduced in IHTA84/S151A-E. These rules provided for one set of provisions provisions to apply for deaths between 6 April 2006 to 5 April 2007, and a different set of provisions to apply for deaths between 6 April 2007 to 5 April 2011.

From 6 April 2011 ASPs ceased and members are able to leave their pension funds in a drawdown arrangement from which they can take withdrawals.

For deaths on or after 6 April 2011, no IHT charges arise in connection with ASPs. As a result the guidance which explained the detail of these charges has been removed from this manual.

If you encounter any reference to an ASP, refer the matter to Technical.