»Ê¹ÚÌåÓýapp

IHTA84/S12 (2A-G) applies to members of registered pension schemes who are under age 75. »Ê¹ÚÌåÓýappse provisions prevent an omission to exercise a right to pension benefits from being a deemed disposition in certain circumstances. »Ê¹ÚÌåÓýappse are derived from the situations that were set out initially in a Tax Bulletin (IHTM17101).

In general, an Inheritance tax charge could arise where a scheme member omitted to take their pension benefits at a time when their life expectancy was seriously impaired. This would result in enhanced benefits being paid on their death. »Ê¹ÚÌåÓýapp omission by the scheme member to take the pension benefits is treated as a disposition under IHTA84/S3(3) which constituted a transfer of value:

• which did not qualify for the exemption for ‘arms lengthâ€� dispositions under IHTA84/S10, and
• when tested at the ‘latest timeâ€� that they could exercise the right (that time being immediately before their death) resulted in a chargeable transfer.

»Ê¹ÚÌåÓýapp omission is not treated as a disposition if;

• there is an actual pensions disposition (IHTM17305), which is not within IHTA84/S10, within 2 years of the death and it can be shown that, at the time of that disposition, the scheme member had no reason to believe they would die within that period
• the lump sum death benefit is paid to a relevant dependant
• there is a payment to a charity