Pension premiums may fall within IHTA 1984, s 10 if the purpose of the payment is to provide a fund for pension income in retirement. Cases where s 10 may not apply will be those made at a time when the health of the individual making the payment is failing. HMRC practice is to review payments made within two years prior to the death if they are substantial and unusual (where they are not made under regular arrangements that have been in existence for more than 2 years)1.
HMRC regards a pension transfer from, for example, a final salary scheme to a SIPP without immediately vesting the benefits under the SIPP as a transfer of value if made within the two years prior to the death.
Parry v HMRC
However, the leading case of Parry2 has potentially changed this position (albeit the fact are very specific).
As part of her divorce settlement, Mrs Staveley was entitled to receive a lump sum and an annuity under a deferred annuity contract. She could elect to
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Web page updated on 17 Mar 2025 17:35