The Government’s proposal to subject inherited pension death benefits to IHT is fraught with practical difficulties and is likely to cause delays increased costs and frustration for beneficiaries according to the CIOT. In its response to the HMRC consultation Inheritance Tax on pensions: liability reporting and payment it has set out an alternative approach where the policy objective could be achieved through an Inherited Pension Death Benefit Charge (IPDBC). This could be payable by the pension scheme administrator (PSA) when benefits pass to a non-spouse or non-dependant avoiding the need for personal representatives to manage pension-related IHT complexities. If this alternative approach is not accepted the CIOT recommends further consultation on the scope and exemptions of the new charge before draft legislation is published.
Its findings also include:
concerns about the complexity of requiring PSAs to report and pay IHT which could delay...
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The Government’s proposal to subject inherited pension death benefits to IHT is fraught with practical difficulties and is likely to cause delays increased costs and frustration for beneficiaries according to the CIOT. In its response to the HMRC consultation Inheritance Tax on pensions: liability reporting and payment it has set out an alternative approach where the policy objective could be achieved through an Inherited Pension Death Benefit Charge (IPDBC). This could be payable by the pension scheme administrator (PSA) when benefits pass to a non-spouse or non-dependant avoiding the need for personal representatives to manage pension-related IHT complexities. If this alternative approach is not accepted the CIOT recommends further consultation on the scope and exemptions of the new charge before draft legislation is published.
Its findings also include:
concerns about the complexity of requiring PSAs to report and pay IHT which could delay...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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