Directors benefit from IHT loophole
Thousands of company directors will be able to pass on assets to their families without paying inheritance tax using a loophole found by insurers.
Over 30,000 small businesses that have established company pension arrangements known as small self-administered schemes (SSAS) will be permitted to hand on assets in the funds to the children of directors under a new form of plan to be launched soon.
Axa, the French insurer, is about to introduce a new product that will allow pension funds in a SSAS to pass between family members on death without incurring IHT.
These transfers are not allowed with personal pensions, where funds remaining on death that have not been used to buy an annuity are subject to IHT.