A (to me) peculiar feature of the new legislation and accompanying Technical Note is that they make a distinction between “personal representatives” (who appear to be executors or anybody holding a grant) and “prospective personal representatives”. The latter can issue withholding notices (s.226A) but only the former can issue payment notices that enable the pension fund to pay the IHT relating to the pension.
So far as I can tell, the PRs need to pay the tax on the pension fund prior to obtaining a grant. This appears to leave administrators needing to either (a) pay the IHT from other sources or (b) persuade the beneficiaries of the death benefits to issue a payment notice.
In theory, somebody intermeddling in the estate, which could include a prospective administrator, would be considered a “personal representative” as the IHTA definition includes “any person who takes possession of or intermeddles with, or otherwise acts in relation to, property so as to become liable as executor or trustee” (Definitions and s.199(4)(a)).
Does anybody have any insight into this apparently odd distinction and/or believe the existing definition could override the odd policy decision that seems to stem from the legislation (v3)?
I fear that pension administrators would be inclined to follow the Technical Note and feel they have to refuse a payment notice from anybody other than executors named in a will.