As the Dentons SIPP and SSAS pension scheme rules provide for the scheme administrator (who in the case of a SSAS is all of the Trustees) to decide, at their absolute discretion, who to pay benefits to and how much, there will normally be no inheritance tax consequences in relation to making those benefit payments.

HMRC might consider inheritance tax applying where the member had been in ill health in the two years prior to their death and during those two years:

  • greater contributions than usual had been paid to their pension scheme, or
  • they had transferred their benefits from one pension scheme to another to get the benefit of more flexible death benefit provisions (e.g. from a defined benefit scheme to a SIPP or SSAS).

Whether there will be any other tax consequences will depend on how old the member was when they died, whether they had taken any retirement benefits and how much lifetime allowance they had left.

Beneficiaries, once selected, can choose in what form they wish to receive benefits.