# Pension passed onto children?



## BadSink (31 Jan 2009)

Hi,

I am self employed and operate as a Limited Liability Company (Company Director)

I make a good contribution to my pension each month.

I recently found out that, as a company director, some pension funds allow
the pension to be passed onto the children when both parties die.

One of these is run by Davy Stockbrokers, described by them as:-

"Davy Executive Pension portfolio, a self-administered pension fund designed to meet the needs of company directors."

Among other things, they describe the following:-

"*At retirement, your fund can be transferred to an Approved Retirement Fund (ARF) as opposed to securing an annuity with a life assurance company. An ARF will continue to grow tax free after retirement whilst you retain full access to your funds.  On your death, an ARF investment can be passed to your wife tax free or to your children who will be subject to a once off 20% tax liability assuming they are over 21 years of age."

Do all Pension funds allow this facility to their clients?

Many thanks,

BadSink
*


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## Lsquared (31 Jan 2009)

I didnt come to the same understanding from reading what you posted. The wording is that the fund can pass to a spouse OR to children, and that would imply to me that if your spouse receives this, then it doesnt then pass further down the chain but in the event that you dont have a spouse, you can elect your children as the recipients. Have I understood this right?


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## Blinder (31 Jan 2009)

The ARF becomes part of your estate when you die. 

There is a good explanation here . You can also get information on the its your money site here


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## StevieC (31 Jan 2009)

ARF's are an inheritable asset. They can be passed to your spouse tax free on death and subsequently they can be passed to your children subject to usual inheritance tax rules.

Its not a case of spouse or children where you have decide on either.

Also you do not have to have a self administered scheme to set up an ARF, you just need to meet the qualifying criteria. The only people really excluded from taking out ARF's at this time are PAYE workers in group pension schemes who do not have an AVC fund.


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