Pension fund savings ‘may be taxed’
Individuals have been warned that delaying withdrawals from a pension fund could lead to their money being subject to inheritance tax.
The warning comes following a controversial court battle involving the HM Revenue and Customs (HMRC) and the family of a woman who died leaving a significant amount of money in her pension fund. Before her death, the woman had assumed her savings would be transferred to a trust. But the HMRC contacted the family to inform them they had underpaid in terms of inheritance tax and would have to pay a fine.
The court ruled in the HMRC's favour, after it was concluded the woman had deliberately not made the most of her pension, making it appropriate for inheritance tax to be imposed on her savings. A spokesman for the HMRC to the Daily Telegraph newspaper said: "HMRC has an established practice of seeking inheritance tax where a person dies after having chosen to defer taking their pension and because of this, their pension savings pass as a lump sum to their beneficiaries."
For more information and advice on issues concerning wills, trusts and probate, please contact the Wills, Trusts and Probate team at IBB Solicitors, covering Buckinghamshire, Amersham, Chesham and surrounding areas. Email email@example.com or call 01492 790002.
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