HMRC confirms USP/ASP withdrawals as income for IHT

HMRC confirmed the classification in talks with Skandia which says it clears up uncertainty surrounding pension income drawdown. The financial services industry previously did not know whether HMRC considered income from USP or ASP as income or partly income and partly capital for IHT exemption for normal expenditure out of income purposes. The development means clients who have excess income from USP or ASP that they do not spend can give it away under the normal expenditure out of income exemption without incurring any IHT liability. Consumers do not need to survive the gifts by se...