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

Pensions and IHT: Why clients can't afford to wait

Pensions and IHT: Why clients can't afford to wait

April 2027 sees unused pension funds come under the scope of IHT

Reena Bhudia
clock 30 June 2026 • 5 min read
'A lot of fear out there': SJP's Claire Trott on IHT on pensions

'A lot of fear out there': SJP's Claire Trott on IHT on pensions

‘Any change drives advice’, head of advice says

Sophia Panayi
clock 29 June 2026 • 3 min read
Paying IHT on pensions: The potentially 'gruelling' process for personal representatives

Paying IHT on pensions: The potentially 'gruelling' process for personal representatives

'Pension entitlements cropping up much later will cause a big headache for PRs'

Rachel Pinn
clock 25 June 2026 • 12 min read