PART 5Inheritance tax etc
94Inheritance tax: pension drawdown funds
1
IHTA 1984 is amended as follows.
2
In the italic heading before section 10, at the end insert “(and omissions that do not give rise to deemed dispositions)”.
3
In section 12(2G) (interpretation of section 12(2ZA)), in the definition of “entitled”, for “166(2)” substitute “167(1A), or section 166(2),”.
4
After section 12 insert—
12APension drawdown fund not used up: no deemed disposition
1
Where a person has a drawdown fund, section 3(3) above does not apply in relation to any omission that results in the fund not being used up in the person’s lifetime.
2
For the purposes of subsection (1) above, a person has a drawdown fund if the person has—
a
a member’s drawdown pension fund,
b
a member’s flexi-access drawdown fund,
c
a dependant’s drawdown pension fund,
d
a dependant’s flexi-access drawdown fund,
e
a nominee’s flexi-access drawdown fund, or
f
a successor’s flexi-access drawdown fund, and
in respect of a money purchase arrangement under a registered pension scheme.
3
For the purposes of subsection (1) above, a person also has a drawdown fund if sums or assets held for the purposes of a money purchase arrangement under a corresponding scheme would, if that scheme were a registered pension scheme, be the person’s—
a
member’s drawdown pension fund,
b
member’s flexi-access drawdown fund,
c
dependant’s drawdown pension fund,
d
dependant’s flexi-access drawdown fund,
e
nominee’s flexi-access drawdown fund, or
f
successor’s flexi-access drawdown fund,
in respect of the arrangement.
4
In this section—
“corresponding scheme” means—
- a
a qualifying non-UK pension scheme (see section 271A below), or
- b
a section 615(3) scheme that is not a registered pension scheme;
“money purchase arrangement” has the same meaning as in Part 4 of the Finance Act 2004 (see section 152 of that Act);
“member’s drawdown pension fund”, “member’s flexi-access drawdown fund”, “dependant’s drawdown pension fund”, “dependant’s flexi-access drawdown fund”, “nominee’s flexi-access drawdown fund” and “successor’s flexi-access drawdown fund” have the meaning given, respectively, by paragraphs 8, 8A, 22, 22A, 27E and 27K of Schedule 28 to that Act.
5
The amendment made by subsection (4)—
a
so far as relating to a fund within the new section 12A(2)(a) or (c) (drawdown pension funds), or to a fund within the new section 12A(3) that corresponds to a fund within the new section 12A(2)(a) or (c)—
i
has effect where the person who has the fund dies on or after 6 April 2011, and
ii
is to be treated as having come into force on 6 April 2011, and
b
so far as relating to a fund mentioned in the new section 12A(2)(b), (d), (e) or (f) (flexi-access drawdown funds), or to a fund within the new section 12A(3) that corresponds to a fund within the new section 12A(2)(b), (d), (e) or (f)—
i
has effect where the person who has the fund dies on or after 6 April 2015, and
ii
is to be treated as having come into force on 6 April 2015.
6
Where an amount paid by way of—
a
inheritance tax, or
b
interest on inheritance tax,
is repayable as a result of the amendment made by subsection (4), section 241(1) of IHTA 1984 applies as if the last date for making a claim for repayment of the amount were 5 April 2020 if that is later than what would otherwise be the last date for that purpose.