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Posted Mon, 07 Aug 2023 10:49:36 GMT by schibbert
My pension advisor says that drawdown income from pensions is classed as capital not income and does not qualify to be used for gifts out of income for IHT purposes even though it is subject to income tax. I have read different reports about this with some saying It does and others saying it is only income from defined benefits pensions that count not income from defined contribution pensions. How do I get correct advise?
Posted Thu, 10 Aug 2023 13:41:16 GMT by HMRC Admin 10
You would need to clarify tha twith the Inheritance Tax Department on 0300 123 1072.
Posted Thu, 10 Aug 2023 13:45:42 GMT by schibbert
I tried that and unfortunately HMRC are not willing to give advice unless dealing with a dead persons estate
Posted Mon, 02 Oct 2023 15:49:58 GMT by Katriona McEwan
Hello, Is there going to be any follow up on this as I would be interested to hear HMRC's views on this as there is much conflicting information on their manuals and guidance and other sites. thanks 

Name removed admin .
Posted Thu, 05 Oct 2023 14:16:33 GMT by HMRC Admin 20
Hi Katriona McEwan,

There are no income tax implications on the giving of or receipt of a cash gift unless the cash gift generates interest or dividends.
These would then potentially be subject to tax.  Further guidance can be found here (Tax on savings interest andTax on dividends).  
You may wish to consider inheritance tax implications where the cash gifts exceed £3000.00 in a tax year.  
(How Inheritance Tax works: thresholds, rules and allowances).  

Thank yout.

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