Q&As

Will funds paid out of a funded unapproved retirement benefit scheme (FURBS), established before A-day, be subject to inheritance tax if no additional contributions have been made to the FURBS after A-day?

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Published on LexisPSL on 29/05/2019

The following Pensions Q&A provides comprehensive and up to date legal information covering:

  • Will funds paid out of a funded unapproved retirement benefit scheme (FURBS), established before A-day, be subject to inheritance tax if no additional contributions have been made to the FURBS after A-day?
  • Inheritance tax treatment pre A-day
  • Inheritance tax treatment post A-day
  • Definition of ‘sponsored superannuation scheme’

Will funds paid out of a funded unapproved retirement benefit scheme (FURBS), established before A-day, be subject to inheritance tax if no additional contributions have been made to the FURBS after A-day?

Inheritance tax treatment pre A-day

Most employer-financed retirement benefit schemes (EFRBS) are trust-based and will be treated as relevant property trusts for inheritance tax (IHT) purposes (see HMRC manual: IHTM17027). According to HMRC, before 6 April 2006, such schemes usually met the definition of ‘sponsored superannuation schemes’ (see definition below). As a result, they fell within section 151 of the Inheritance Tax Act 1984 (IHTA 1984) and were thus excluded from being a relevant property trust by virtue of IHTA 1984, s 58(1)(d) (as in force before 6 April 2006) (see HMRC manuals: IHTM17038 and IHTM17039). This meant that no IHT was payable, among other things, when property

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