Nature of omission

The deceased had been born in 1942. In 1995 she set up a discretionary trust and later in the same year took out a pension plan under which she could take her retirement benefits at any time between her 50th and 75th birthdays.

If she died before drawing her pension the value of the benefits would pass into the trust. She died as a result of terminal cancer in 2003 without taking any pension payments from the plan.

HMRC issued a determination charging inheritance tax on the basis that the deceased had made a transfer of value for the purposes of IHTA 1984 s 3(3) by not drawing her pension under the plan.

She made a deliberate decision not to do so which led to her own estate being reduced but thereby increasing the value...