Postby darthblingbling » Wed Nov 24, 2021 2:48 pm
This is the Stavely case
https://www.ftadviser.com/pensions/2020/08/19/supreme-court-rules-ill-health-pension-transfer-not-liable-for-iht/
The transfer on death was not subject to IHT the court ruled, but as there was no intention by her to ever draw down the pension pot IHT was charged on her death as her omission to act reduced the value of her estate.
Obviously isn't 1 to 1 in your case, but it is something to be aware of in that HMRC could potentially challenge as using a pension pot to clearly avoid IHT could be deemed to be abusive tax avoidance given it's not the intention of law.
I mean if I had £1m I wanted to transfer to my son on death, it would be far too easy to just slap into a SIPP, never draw down and name them as the beneficiary.
Also the reason why other people have commented that your 40% band has increased is because of the BR relief you can claim on your gross contributions (i.e. £50270 + £3600)