Adviser says IHT 'loophole' could help Revenue
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By James Salmon
Adviser Smith & Williamson says an SSAS inheritance tax "loophole" would benefit tax collection.Standard Life has accused Axa using a SSAS loophole which enables small businesses to pass on assets tax-free, and, in theory, allows family members to set up schemes to bypass IHT.
The Revenue has pledged to clamp down on any abuses.
But Smith & Williamson national head of pensions Mike Fosberry says SSAS concerns are misplaced and that clients in scheme pensions have to pay more tax than people in other forms of income drawdown.
Fosberry says, under a scheme pension, the individual has to get a known level of pension entitlement which would be subjec t to tax on payment, while under alternative forms of income drawdown, an individual is not required to take any income at all.
He says: "From the point of view of the Revenue, therefore, the scheme pension provision must be rather more attractive as it ensures collection of tax which might otherwise be deferred until some point in the future."
Standard Life head of pensions policy John Lawson says:
"We are not asking for scheme pensions to be scrapped and we accept they are valid. But clients should be warned they might not be able to pass on residual funds without IHT."
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