In HMRC v Personal Representatives of Rachel Staveley (dec’d) & Others [2017] UKUT 004 the Upper Tribunal (UT) found that a failure to exercise pension rights was not a transfer of value.

The taxpayer transferred a pension to a personal pension prior to her death inorder to avoid an ex-husband benefiting from her savings.

On the transfer she completed an expression of wishes requesting that death benefits be paid to her sons. 

She also chose not to access any lifetime benefits to which she was entitled to maximise what was left for her sons.

HMRC claimed there was a transfer of value for IHT purposes on:

  • The transfer from one pension to another, and
  • The decision not to take lifetime benefits.

On appeal the UT rejected both points, and in overturning the decision of the FTT found that neither was a transfer of value:

  • There was no intention on the pension transfer to confer a gratuitous benefit on the taxpayer’s sons, and therefore the exception applied.
  • The omission to take lifetime benefits did not directly cause an increase in her son’s estate.


Our subscriber guide: IHT: estate planning checklist

Case reference: HMRC v Personal Representatives of Rachel Staveley (dec’d) & Others [2017] UKUT 004


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