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Jargon Buster

Income drawdown

A concept under FA04, allowing money purchase scheme members to drawn income from their fund, leaving the rest invested.


A scheme where its design takes account of state pension benefits that will be payable.


Income & Corporation Taxes Act 1988


Income Tax (Earnings & Pensions) Act 2003


Internal Dispute Resolution Procedure

Internal Dispute Resolution Procedure

Most occupational schemes are required to have in place an IDRP to resolve member disputes. The Pensions Ombudsman will expect this to have been used before complaints are taken further.


Inheritance tax, mainly contained in the Inheritance Tax Act 1984.

IIP trust

An interest in possession trust (see also life interest trust): prior to FA 2006, creating an IIP trust was a PET and the life tenant was treated as owning the assets for IHT purposes. Since FA 2006, it is only possible to create an IIP trust during lifetime for certain specified beneficiaries (e.g. disabled).

Income tax

The tax on an individual or trust’s income, after taking into account any allowances, deductions or reliefs.

Indexation allowance

An allowance for CGT to take into account inflation, abolished for individuals by the introduction of the CGT taper relief (now in turn replaced by the flat rate of CGT).


Dying without a will or testament, so the relevant laws of succession determine who inherits the estate.


An immediate post-death interest; introduced in FA 2006, allowing a testator to leave assets in his/her will to someone who is then treated as owning the assets in the IPDI trust for IHT purposes (like a pre-FA 2006 IIP trust).


New UK residence rules

The UK Government plans to introduce a new residence test. The aim originally was to bring these new rules into effect from 6 April 2012, but this has now been postponed to 6 April 2013. This is a summary of the current proposals, as amended by the draft legislation that was published in December 2012. It is possible the rules could be changed again before they come into force.

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