One FT Adviser reader has written in to flag potential problems with unspent pension wealth on the back of upcoming inheritance tax changes.
The reader wrote:
“If everybody who has pension wealth just kept it in a bank as money, of course it’s an easy target to grab 40 per cent initially by HMRC if that takes that person over the IHT limits set.
However in the case of a pension fund like a small self-administered scheme (Ssas), it can have 12 members, and the fund can lean towards commercial property investments.
The trustees of such schemes are duty bound to protect the members and investments.
So selling a property quickly to settle the unspent pension IHT demand could compromise the value of the remaining members’ investment.
That could be a dereliction of duty and certainly a challenge to fiduciary responsibility.
In theory the trustee could get sued by the other members because the trustee is forced to pay up a certain amount of money, with that value not ascertained until the property is sold.
Who’d be a trustee in the future?
The whole tax grab is ill-thought-out.
Who would invest funds in property going forward if a forced sale happens due to the death of a member?
I’ve wrote direct to the Treasury and Rachel Reeves about this, but so far no comment.
By the way, if I elect all my money from whatever source that’s over IHT to the Labour party, there is no IHT to pay!”
