Chancellor confirms Inheritance Tax position for SSASs and SIPPs
Following the budget if you are a member of a SSAS or SIPP the Chancellor has confirmed the tax position on your remaining scheme benefits if you die after reaching age 75.
The new legislation comes into effect on 6 April 2006 and until now we have been unclear if tax was due on payments made to your beneficiaries. If you leave a partner, or another financial dependant, then a pension can be paid to them.
If there is no such dependant, or on their subsequent death, we understand that the remaining funds can be used by the scheme trustees to provide retirement benefits for other family members, but the amount transferred would be assessable to Inheritance Tax. If the remaining funds are instead paid to a registered charity there will be no Inheritance Tax assessment.
Barnett Waddingham LLP, March 2006.