Can using a TRUST for my SIPP help avoid paying Inheritance Tax ??

ukbpen1964

To the more astute legal and financial advisors on here - I read somewhere that by placing my SIPP into a Trust it protects it from IHT - is that correct ? 

tacpot12

All SIPPs (and other Personal Pensions) are already trusts, so you can't put the SIPP into a trust.

Marcon

tacpot12 said:

All SIPPs (and other Personal Pensions) are already trusts, so you can't put the SIPP into a trust.

You can, in the sense that when you draw out the proceeds, paying the appropriate level of tax, you can pay them into a(nother) trust, and some people do precisely that.

dunstonh

ukbpen1964 said:

To the more astute legal and financial advisors on here - I read somewhere that by placing my SIPP into a Trust it protects it from IHT - is that correct ? 

Based on the consultation information published so far, the value of the pension is assessed for IHT before it is paid out.    The Trust, if there was one, would receive the amount net of IHT already paid.   So, a trust cannot avoid IHT on first death.       

However, for second and subsequent deaths, IHT could be avoided by using a trust.  However, different taxation replaces it.

The consultation will almost certainly see adjustments before going live and there is still incomplete information.