News Release for Members of QROPS, De-Listed QROPS, QNUPS Following Autumn 2024 Budget

This affects QNUPS, QROPS and delisted QROPS e.g. Aurora Libertai International Pension Plan, Aurora Quantum, Aurora International Pension Plan, Aurora Libertai Retirement Benefits Trust, Aurora International Plan (Africa, US), Aurora International Retirement & Savings Plan.

Significant changes are being proposed to the UK Inheritance Tax (IHT) regime which may affect members of the above-mentioned pension plans who currently benefit from an exemption from IHT on their unused pension funds on their death.

In their consultation document, the UK government states:

As announced at Autumn Budget 2024, from 6 April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for Inheritance Tax purposes and pension scheme administrators will become liable for reporting and paying any Inheritance Tax due on pensions to HMRC.

In essence, the proposal is to remove the exemption from IHT which otherwise relieves your pension funds from the exposure to 40% IHT on your death. We stress that this is a proposal, subject to a consultation which has started and ends in January and with a proposed start date of April 2027. Given that this is some time away, IHT is a very complicated area, and the consultation has just started there are no definitive law changes to review. Unintended consequences have already been identified by industry and, as such, the proposal may well change over time. Presently, the uncertainty is not helpful, but anything could happen in the run up to 2027.

Industry is already working on options for clients during this period and we are waiting for legislation to be drafted – so further updates are expected.

Concept Group do not provide tax advice and highlight the need to take detailed professional tax advice where reliance on tax advice is required.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.