There are “serious concerns” among the pension industry on the timescales being proposed for beneficiaries to pay inheritance tax on pensions.
This issues has been raised by the Society of Pension Professionals in its response to he House of Lords Economic Affairs Committee, which is holding a call for evidence on this issue.
In its response that SPP reiterated its support for the government’s decision to make personal representatives (PRs) responsible for the reporting, liability and payment of IHT on pensions rather than pension scheme administrators, as originally proposed.
It says this is because “continuing to use existing payment methods, and to leave the calculation and payment of IHT to the PR and HMRC is not only less costly for schemes to administer but in most cases will result in benefits being paid quicker, and ultimately will prove more effective for all interested parties.”
However it says: “Timescales for the payment of IHT under the intended new regime are a serious concern for both PRs and pension scheme administrators.”
The SPP’s response adds: “There remains uncertainty about the actual processes to be followed after a death is notified, as the finer details are to be set out in secondary legislation and, we expect, supporting HMRC guidance.”
SPP chair of its legislation committee Shayala McRae says: “We have again made clear that the government’s decision to accept SPP’s key recommendation that administrators should not be liable for the reporting and payment of inheritance tax on pensions and that this responsibility should lie with personal representatives, is welcome.
“There remain serious concerns about timescales and that is reflected in our response. Similarly, we have taken this opportunity to raise concerns around some of the uncertainty that remains as we are now just 18 months away from implementation.”