Clare Moffat: Why the spousal bypass trust remains a useful planning tool

Bloodline planning

clock • 4 min read

Spousal bypass trusts can help in complex family situations, explains Clare Moffat, and are still highly relevant even after the introduction of the Taxation of Pensions Act 2014

Death benefits on pensions are usually not liable to inheritance tax (IHT) on the death of a member. Before April 2015, the main reason spousal bypass trusts were set up was so lump-sum death benefits did not become part of the IHT assessable estate of the intended beneficiaries. New legislation introduced by the Taxation of Pensions Act 2014, however, means that, in the vast majority of cases, the benefits are now able to pass down through generations free of IHT - as long as they remain in the pension wrapper. As such, many have said that spousal bypass trusts are no longer required. ...

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 Tax planning

IHT on pensions: Advisers on a new way of working

IHT on pensions: Advisers on a new way of working

‘It has shifted the timing and focus of conversations’

Jenna Brown
clock 10 June 2026 • 8 min read
New tax powers can trace money – home and away

New tax powers can trace money – home and away

Tightened border controls could trigger tax probes

David Morley
clock 10 June 2026 • 3 min read
Breaking the last-minute tax planning cycle

Breaking the last-minute tax planning cycle

'Tax year-end remains one of the most stressful times for advice professionals'

Sophie Hall
clock 10 June 2026 • 3 min read