The Institute said that draft legislation for inheritance tax, which includes unused pension funds and death benefits, is 'unworkable' for cases where pension beneficiaries are different to the estate beneficiaries.
ICAEW said while it agreed with the overall shape of the policy it had major concerns about implementation. It also highlighted serious concerns about the lack of representation from personal representatives, compared to the rest of the pensions industry.
Katherine Ford, Technical Manager, ICAEW said:
“Under the proposed draft legislation, personal representatives will have to pay inheritance tax on pensions funds they do not control and will struggle to enforce the right of recovery from pension beneficiaries.
“The estate beneficiaries will be worse off if they must bear tax that should be borne proportionately by the pension beneficiaries. Due to the risk of personal liability, few professional or lay people will want to act as personal representatives, which means the reforms as they stand will be unworkable.
“The fair and equitable solution is to have a withholding of inheritance tax on unused pension funds, to balance the interests of both estate beneficiaries and pension beneficiaries.
“The draft legislation needs an urgent rethink.”
ENDS
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