I am tying myself in a knot with a case I think, I would appreciate the comments of the Forum to assist.
I am dealing with a discretionary trust set up as a pilot in the client’s lifetime to receive his death benefits from a Death in Service scheme and also lump sum death benefits from a pension scheme.
s.81 IHTA 1984 means that each element refers back to the date of joining each scheme, so I have various elements with different 10 year dates relating to the joining date of each scheme.
Where I am stuck is, what is the NRB for each element? Assuming that no CLTs were made in the years before joining the schemes, and a full NRB was available on death, does each element have its own full NRB or is it apportioned? It would seem uncharacteristically generous of HMRC to allow a full NRB in respect of each amount transferred from a different trust, but I can’t find anything which says anything different, and IHTM17084 is silent on the point.
My understanding is that as the pension arrangement itself involves a trust, payments of benefits in to more than one pilot trust under s81 are nevertheless treated as remaining in the initial trust in respect of which the pension was taken out.Thus, only one NRB is in point.
However, where a number of separate pension trusts exist payment of more than one benefit in to the pilot trust gives rise to a number of NRBs.
Just picking up on this point - would it then make sense creating a pilot trust for each of the individual Penstion trusts? As those facts will be known at the outset and so a pilot trust could be created to accept funds from the respective Pension Trusts.
Would make the reporting/calculations a bit easier.