Summary
Bypasses have their benefits in the financial as well as the medical world. For many of us our pension fund will be our second biggest asset, the first being our main residence. It is worth considering how best to preserve that main asset for when it is inherited and a spousal bypass trust can be an effective method of reducing tax liabilities. Although property prices have fallen in the last year, many people left an estate will find the majority of the joint nil rate band of pounds 650,000 for Inheritance Tax (IHT) will be used up and therefore any residual balance will face an IHT liability of 40 per cent.
With gifts between spouses exempt from IHT, it is understandable why pension benefits, whether it be a pension fund from a money purchase scheme such as a personal pension or a SIPP or a death in service benefit, are nominated to be paid to a spouse.See the full content of this document
Extract
A Completely Different Type of Bypass
At first this may have removed any potential rise to IHT. However it has only compounded a problem. On the subsequent death of the surviving spou...
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