Actuarial consultancy Punter Southall has branded the Government's 82% tax on surplus pension funds handed to family as inheritance "disproportionate".
The rules, outlined in this week's Pre-Budget Report (PBR), will treat any increase in the pension rights of one member following the death of another member - if the two members were connected - as an unauthorised payment. This means that there will be a tax charge of 70%, the same as applies to funds passed on via alternatively secured pension (ASP). The funds passed on will also be liable to inheritance tax (IHT), bringing the potential tax charge to 82%. The charge will not apply if the scheme has 20 or more members and the funds arising following the member's death are evenly distr...
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