Pensions: alternatively secured pensions: meaning of dependant and relevant dependant
For Inheritance Tax (IHT) purposes ‘relevant dependant’ is defined in IHTA84/S151A(5) as a dependant who:
- is the person’s spouse or civil partner immediately before their death; or
- is financially dependant on the person at that time.
This is a different definition from the Income Tax rules for payment of dependant’s pensions.
So, for IHT purposes, it is possible to have a situation where a dependant’s pension is being paid from ASP funds but that dependant does not fall within the stricter test of financial dependency in IHTA84/S151A(5). The test is factual so if the person is not financially dependent (financial interdependence for instance is not enough) or at some time ceases to be financially dependent the charge to IHT will arise.