Inheritance tax risk from Govt pension fund
Those on Government-backed pension scheme, Nest, could be hit by taxes of up to 40%.
NEST’s maximum contribution cap will be lifted in April this year, allowing members to contribute the full annual allowance of £40,000pa. In addition, NEST will also open its doors for the first time to transfers in with a 0.3% annual charge. However, Salvus (the provider of bira Pensions) is concerned these new policies on contributions and transfers give rise to an unintended consequence of exposing NEST pension pots to inheritance tax, or IHT.
Typically pension pots of all registered pension schemes (including bira Pensions) are not usually classed as part of an individual’s estate and are therefore not subject to inheritance tax.
Graham Peacock, of Salvus, said: “It is completely inappropriate that members should face IHT whilst using a DWP-backed workplace pension. It completely flies in the face of industry-wide efforts to create a pensions landscape that is simple, transparent and trustworthy.”
Nest was created as a provider of last resort to support the government’s flagship “automatic enrolment” savings programme.
Read more from Salvus Master Trust or The Telegraph linked below.
Wren Sterling, providers of bira pensions, will provide ongoing updates on this situation changes. In the meantime, if you haven’t yet arranged your workplace pension, bira Pensions is available for £359+VAT to set up with an annual governance charge of £115+VAT and acceptance is guaranteed for all bira members.