The mother in law....

[flyer61]

Aged 84.....no earned income and no tax relief available over the age of 75. Is there any advantage in opening a pension in her name, I am thinking of inheritance tax down the line...or is this avoidance and we would get thwacked?

[Kantwebefriends]

Presumably you've found a provider who will let her contribute under these circs?

I wouldn't risk it. If she changes her mind and takes the money out again 75% will be taxed. If somebody else inherits they'll have to pay income tax on withdrawals, and she risks a change in the law that might mean the tax deal on an inherited pension becomes worse.

Is she already taxing max advantage of ordinary IHT exemptions e.g. the regular gifting of surplus income?