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HMRC internal manual

Inheritance Tax Manual

Pensions: alternatively secured pension (ASP) between 6 April 2006 and 5 April 2007: procedure when an ASP charge arises: death of relevant dependant (or ceasing to be a relevant dependant): charge under IHTA84/S151B

Where within 6 months of death the leftover ASP funds were used to purchase relevant dependant’s benefits, a recapture charge referable to the estate of the scheme member will arise when the dependant dies or ceases to be a relevant dependant. The scheme administrator is accountable and liable and should deliver form IHT100 containing details of the asset in the ASP fund immediately before the dependant died or ceased to be a relevant dependant.

This charge is a ‘top slicing’ charge and works in the same way as the charge under IHTA84/S126 for the sale of woodlands. In other words, the chargeable property is added to the rest of the scheme member’s estate, without affecting the tax that is payable in respect of it.

Again no reliefs are available and neither is the instalment option.

When the account is received you should assess and collect the tax at the scheme member’s file in the normal way.

In the event that the original scheme member’s left-over ASP fund was used to benefit more than one relevant dependant you should add a future review date to ALF to review in respect of the surviving dependants. Otherwise the file can be closed as soon as the tax is paid.