If you run a payroll service and have used or recommended NEST in the past 4 years you need to consider the unintended consequences of being exposed to Inheritance Tax. Currently as it stands NEST members who die before retirement could be subject to IHT?
For many members with very small pots this may not be an issue, however with NEST launching their transfer in service in April 17 this could expose 1,000’s of members to this IHT problem! Imagine a member who innocently transfers in £100K then sadly dies…potentially 40% could be taxed (assuming estate over £425,000 with the new Nil Rate Band from April 17)!
Obviously this is a “quirk” of NEST rules and many people are unaware; however NEST clients and their staff could be affected.
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