Posted by Tony Millson, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Inheritance Tax rules clarified in the Autumn Statement
The Treasury has sought to allay fears by confirming that Inheritance Tax (IHT) will not be levied on savings left in pension pots when an individual dies.
The announcement in yesterday’s Autumn Statement will be welcomed by those who were concerned by the potential impact on drawdown funds.
Uncertainty had arisen following changes to pension rules, which gave people the option of leaving a pension fund to a beneficiary tax-free.
There were fears that those who purposefully failed to use up their fund – having sufficient assets elsewhere – might be accused of tax avoidance and IHT would apply to the money they had not spent.
The documents released by the Treasury following the Chancellor’s speech confirm that this will not be the case.
“The Government will legislate to ensure a charge to IHT will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death,” it said. “This will be backdated to apply to deaths on or after April 6th, 2011.”
Pension experts said that the recent pension freedoms had created something of a grey area and welcomed yesterday’s clarification.