difference between nominee and appointee

mrseyes

what is a legal difference between nominee and appointee.

DRS1

I think this is to do with who receives the lump sum benefit payable if you die. Typically an occupational pension scheme will have a discretionary trust provision to allow the trustees to distribute the money within two years after death. So that the trustees know who you would like to get the money they will ask you to nominate someone. That would be the nominee. The nomination is not legally binding on the trustees and so they retain a discretion as to how to apply the money. That allows the money to pass free of inheritance tax.

On the other hand if you had power to appoint who gets the money and exercised that power while you were alive then the trustees would have no choice as to who gets the money; it would have to go to the appointee. In that case the revenue would say it was part of your estate for inheritance tax purposes.

It would be very unusual to find that you had a power to appoint under an occupational pension scheme, so hopefully the issue should not arise.