Where an individual has set up a SIPP, does it’s existence need disclosing in the IH409?
Any guidance would be very much appreciated.
Many thanks.
Martyn Dixon
Harold Bell Infields & Co
https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm17011
Where the deceased had a pension the IHT409, a supplementary form to IHT400, has to be completed.
This form essentially asks the questions which allow HMRC to identify if any IHT is payable in respect of the pension funds.
A Self Invested Pension Plan is usually written in Trust and as such should not form part of the deceased estate when calculating inheritance tax.
Warning things to consider
Ill-health and the ‘two year rule’
If your client did any of the following, it is worth noting that it may be treated as a ‘transfer of value’ and added back into their estate for IHT if they are carried out whilst the client is known to be in ill health:
1.transferring benefits to another scheme
2 paying contributions and
3 placing buy out plans or retirement annuity contracts in trust
The value transferred will have no value if they are in normal / good health at the time. HMRC will generally assume someone is in normal health if they survive for two years.
If a client dies within two years, the client’s executors must report this to HMRC on form IHT409.
This can easily be overlooked.
The value transferred will then be based on the details of the client’s specific situation at the time of the transfer or contribution.
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