Trust could remove death-in-service IHT risk

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Clients could limit children's inheritance tax liabilities associated with death-in-service benefits by asking trustees of an occupational pension to place assets into a flexible trust, suggests a Cornwall-based IFA.

Following reports last week of a potential death-in-service benefits IHT liability within new pension legislation, Peter McGahan, managing director of Worldwide Financial Planning in Cornwall, says intermediaries should encourage clients to write a letter to the trustees of their occupational pension scheme and limit the risk of IHT in cases where the individual’s assets may cross the IHT threshold. "Most estates, with house inflation, life assurance and other assets added in, come to over the £263,000 nil rate band that is allowed for inheritance tax. Any death-in-service lump sum is a...

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