Trust could remove death-in-service IHT risk

clock

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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

US-Iran truce eases inflation picture but markets to experience 'hangover'

US-Iran truce eases inflation picture but markets to experience 'hangover'

Fed and BoE face 'balancing act'

Michael Nelson
clock 15 June 2026 • 3 min read
FCA takes civil action against Neil Woodford and W4.0 for 'operating without authorisation'

FCA takes civil action against Neil Woodford and W4.0 for 'operating without authorisation'

Accused of breaching FSMA

Michael Nelson
clock 08 June 2026 • 2 min read
M&G's PruFund coming to Scottish Widows Platform

M&G's PruFund coming to Scottish Widows Platform

First third-party platform launch

Jen Frost
clock 08 June 2026 • 2 min read