Inheritance Tax Act 1984

151C Dependant dying with other pension fund U.K.

(1) This section applies where—

(a) a dependant of a member of a registered pension scheme has a dependant's alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and

(b) section 151B above does not apply.

[F1 (2) Tax shall be charged on the relevant amount as if it were part of the value transferred by the transfer of value made on the dependant's death at the rate or rates at which it would be charged if it formed the highest part of that value.]

(3) The relevant amount is—

(a) the aggregate of the amount of the sums and the value of the assets forming part of the dependant's alternatively secured pension fund immediately before his death [F2 but reduced by the amount of any previously charged income tax] , less

(b) so much of sums forming part of the dependant's alternatively secured pension fund (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid as a charity lump sum death benefit within the period of six months beginning with the end of the month in which his death occurs.

[F3 (3A) In subsection (3)(a) above “the amount of any previously charged income tax” means the amount of any liability to income tax which (after the dependant's death but before the time when tax is charged on the transfer of value treated as made by the dependant on death) has arisen by virtue of the making of an unauthorised member payment under Part 4 of the Finance Act 2004 relating to the dependant's alternatively secured pension fund.

(3B) Subsection (3C) below applies where the maximum [F4 amount that could be transferred by a chargeable transfer made (under section 4 above) on the dependant's death if it were to be wholly chargeable at the rate of nil per cent. (assuming, if necessary, that the value of the dependant's estate were sufficient but otherwise having regard to the circumstances of the dependant)] exceeds—

(a) the value actually transferred by [F5 the chargeable transfer so made], less

(b) any previously untaxed dependant's alternatively secured pension fund amount.

(3C) Where this subsection applies, tax is to be charged on the previously untaxed dependant's alternatively secured pension fund amount as if the nil rate band maximum were—

where—

UNRB is the unused nil rate band, that is the excess mentioned in subsection (3B) above; and

MUPR is the maximum unauthorised payment rate, that is the maximum aggregate rate at which tax is chargeable under Part 4 of the Finance Act 2004 in respect of an unauthorised member payment.

(3D) The relevant amount is to be reduced by the aggregate of so much of the sums and the value of the assets of the dependant's alternatively secured pension fund as arises, or (directly or indirectly) derives, from sums or assets forming part of an alternatively secured pension fund of the member which were designated as available for the payment of—

(a) dependants' unsecured pension, or

(b) dependants' alternatively secured pension,

to the dependant under the arrangement.]

(4) In this section—

• “charity lump sum death benefit” has the meaning given by paragraph 18 of Schedule 29 to the Finance Act 2004;

• “dependant” has the meaning given by paragraph 15 of that Schedule 28 to that Act; F6 . . .

• [F7 “dependants' alternatively secured pension” has the meaning given by paragraph 19 of that Schedule;]

• “dependant's alternatively secured pension fund” has the same meaning as in Part 4 of that Act (see paragraph 25 of [F8 that Schedule]).

• [F9 “dependants' unsecured pension” has the meaning given by paragraph 18 of that Schedule;]

• [F10 “previously untaxed dependant's alternatively secured pension fund amount” means so much of the aggregate mentioned in subsection (3)(a) above as has not given rise to any liability to tax by virtue of Part 4 of the Finance Act 2004 before tax is charged on the transfer treated as made by the dependant on death.]

Textual Amendments

F1 S. 151C(2) substituted (with effect as mentioned in Sch. 19 para. 29(8) of the amending Act) by Finance Act 2007 (c. 11), s. 69, Sch. 19 para. 23(2)

F2 Words in s. 151C(3)(a) inserted (with effect as mentioned in Sch. 19 para. 29(8) of the amending Act) by Finance Act (c. 11), s. 69, {Sch. 19 para. 23(3)}

F3 S. 151C(3A)-(3D) inserted (with effect as mentioned in Sch. 19 para. 29(8) of the amending Act) by Finance Act 2007 (c. 11), s. 69, Sch. 19 para. 23(4)

F4 Words in s. 151C(3B) substituted (21.7.2008) by Finance Act 2008 (c. 9), s. 91, Sch. 28 para. 9(2)(a)

F5 Words in s. 151C(3B) substituted (21.7.2008) by Finance Act 2008 (c. 9), s. 91, Sch. 28 para. 9(2)(b)

F6 Word in s. 151C(4) repealed (with effect as mentioned in Sch. 19 para. 29(8) of the amending Act) by Finance Act 2007 (c. 11), ss. 69, 114, Sch. 19 para. 23(5), Sch. 27 Pt. 3(1)

F7 S. 151C(4): definition of "dependants' alternatively secured pension" inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 91, Sch. 28 para. 9(3)

F8 S. 151C(4): words in definition of "dependants' alternatively secured pension fund" substituted (21.7.2008) by Finance Act 2008 (c. 9), s. 91, Sch. 28 para. 9(3)

F9 S. 151C(4): definition of "dependants' unsecured prnsion" inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 91, Sch. 28 para. 9(3)

F10 Words in s. 151C(4) inserted (with effect as mentioned in Sch. 19 para. 29(8) of the amending Act) by Finance Act 2007 (c. 11), s. 69, Sch. 19 para. 23(5)