Pensions

Pensions

This subtopic provides an overview of the UK pension system for the Private Client practitioner, including regulation, governance, taxation, lifetime planning, the treatment of pension funds on death and overseas aspects of pension schemes.

An introduction to the UK pension systems for the private client practitioner—how pension schemes are governed and the key regulatory bodies

In the UK, the overwhelming majority of pension schemes in the private sector, ie both occupational and personal pension schemes, are established under trust and are therefore subject to trust law. The trustees appointed under the trust deed are required to act in accordance with the trust deed and rules and overriding legislation governing pension schemes. Probably the most important tenet of trust law is that the trustees must act in the best interests of the members of the pension scheme.

In the public sector, pension schemes are established mainly by statute and are subject to their scheme rules and overriding legislation, but some are established under trust and thus subject to trust law and are therefore required to act in accordance with the trust deed and rules as well as any overriding legislation.

For

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Latest Private Client News

Question of the week: If the sole trustee of a trust appoints an additional trustee to sell trust property, in order to overreach the beneficial interest in the property, do the beneficiaries of the trust have the right to receive information about the identity of the additional trustee?

This Q&A considers whether a beneficiary of a trust has a right to receive information, on request, about the identity of the trustees.

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Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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Private Client analysis: The case concerns a guardianship order made in Scotland in January 2025 for three years in respect of RF. There were two issues in the case. The first was whether the guardianship order gave Argyll and Bute Council (‘the Local Authority’) the power to authorise the deprivation of RF’s liberty in England. The second issue was, if so, whether the Court of Protection in England and Wales should grant recognition and enforcement of the guardianship order as applied for by the Local Authority. The Official Solicitor on behalf of RF opposed the application on the grounds that there was no effective route for RF to challenge his confinement or trigger a review of the restrictions on him. In dealing with these arguments the court gave a useful analysis of Article 5 of the European Convention on Human Rights (the Convention) as applied to any specific guardianship order. Written by Lynne Counsell, barrister at Addington Chambers.

Ex-solicitor hit with first individual tax avoidance stop notice

Law360, London: HMRC has ordered a struck-off solicitor to stop promoting two tax avoidance schemes, the first notice of its kind issued against an individual, the tax authority said on 15 May 2025.