Finally, and perhaps more niche is where death benefit options under a plan are amended — for example, older plans where death benefits may have been changed from return of premium to return of fund.
Broadly, if there is no evidence of ill health when the changes described above are made and they were made more than two years ago, there may not be any scrutiny. If ill health is detected at the point the changes are made, enquiries may be made.
There is no doubt pensions as intergenerational wealth transfer vehicles are very generous, and far removed from the days when pension tax reliefs were first granted, with the aim of encouraging you to save for you and your dependant's retirement.
Bringing pensions into the relevant property regime would be fraught with complexity, and to override the general IHT principles to bring pensions into this regime would have a myriad complications.
Making pensions simpler is a good aim, but piecemeal tinkering can often lead to further complexity. If dampening their use as intergenerational planning vehicles is the desired outcome, this could perhaps be delivered most simply through a change to the taxation of benefits.
Les Cameron is head of technical at M&G Wealth
