IHTM17056 - Pensions: IHT Charges: protected rights up to 6 April 2012

Protected rights are not relevant where a death is on or after 6 April 2012. After this date, any protected rights pension funds are payable in the same way as any other pension funds.

Before 6 April 2012, there were restrictions on the payment of protected rights pension funds and these could form part of the estate.

Protected rights were derived from a pension scheme which had been contracted out of the second state pension (S2P) (or, previously, the state earnings related pension scheme (SERPS)). Contracting out means that the member gives up state benefits under S2P or SERPS, in exchange for payments by the Government into the contracted-out scheme. These payments constituted the protected rights fund which was ring-fenced and could only be paid out in certain prescribed ways.

Protected rights were abolished from 6 April 2012 by Section 106 of the Pensions Act 2008.