The government should remove pension provider discretion on the distribution of death benefits and introduce a blanket inheritance tax (IHT) exemption to simplify the process for consumers, AJ Bell has said.
The platform and pension provider has written to Chancellor Philip Hammond urging him to act on the issue. Under the existing rules, pension death benefits are exempt from IHT in most cases because the provider has discretion around who they are paid to. AJ Bell research found that just 7% of people understood how their pension funds would be treated on death. The provider argued that if the majority did not understand the process, they may not know who will receive their pension death benefits or how they would be taxed. It pointed out providers are obliged to consider all potenti...
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