Part 9Pension income
Chapter 5APENSIONS UNDER REGISTERED PENSION SCHEMES
F1579CBRefund of overpaid inheritance tax treated as pension
(1)
This section applies if—
(a)
an amount of inheritance tax that is attributable to the value of notional pension property of a deceased member of a registered pension scheme is paid,
(b)
some or all of the inheritance tax paid—
(i)
is repaid under section 241(1) of that Act to a person, other than a non-qualifying person, who is entitled to receive benefits under the scheme on the deceased’s death (a “beneficiary”), or
(ii)
is repaid under that section to the deceased’s personal representatives and passed on by the personal representatives to a beneficiary,
(c)
in a case in which the payment of inheritance tax mentioned in paragraph (a) was made by the beneficiary or by the deceased’s personal representatives, a deduction is allowed under section 567B in respect of the payment, and
(d)
the deceased was aged 75 or over at the date of their death.
(2)
The relevant amount is treated for the purposes of this Part as though it were a pension paid under the registered pension scheme (and is treated as accruing in the tax year in which it is paid).
(3)
In subsection (2) “the relevant amount” means—
(a)
in a case in which the payment of inheritance tax mentioned in subsection (1)(a) is made by the scheme administrator, the amount of the payment made to the beneficiary mentioned in subsection (1)(b)(i) or (ii);
(b)
in a case in which the payment of inheritance tax mentioned in subsection (1)(a) is made by a beneficiary or by the deceased’s personal representatives, the lesser of—
(i)
the amount of the payment made to the beneficiary mentioned in subsection (1)(b)(i) or (ii), and
(ii)
the deduction allowed under section 567B in respect of the payment of inheritance tax mentioned in subsection (1)(a).
(4)
In this section—
“inheritance tax” includes interest on inheritance tax;
“non-qualifying person” has the same meaning as in section 206 of FA 2004 (special lump sum death benefit charge).