Bypass Trusts: Reassessing their role in a changing legislative landscape

Before pension freedoms, it wasn’t uncommon for death benefits from a pension to be placed into a Bypass trust. 

Since then, with the ability to pass pensions down the generations free of IHT, use of this type of trust has declined. It does, however, still have a place in financial planning. Whether that’s under the current rules, or once the proposed changes to pensions and IHT land in April 2027.  

In this session, Senior Technical Manager Neil Macleod looks at where we stand now with the Bypass trust, and why and when this type of trust can be used going forward. 

The event qualifies for up to 90 minutes of Structured CPD accredited by CII. By the end of the session you will be able to:

• Describe what a bypass trust is and how it interacts with the pension regime
• Explain the Income tax and IHT implications of using a bypass trust 
• Identify clients who could benefit from using a bypass trust to receive their pension death benefits – both under current rules and the proposed changes in April 2027.

Neil Macleod

(Senior Technical Manager) M&G Technical Team

Neil has worked in financial services for over 15 years. Before joining Prudential, Neil worked in various roles within a Bank and IFA environment. This has involved providing financial advice to individuals as well as support for advisers in paraplanning.   

"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at 5 Central Way, Kildean Business Park, Stirling, FK8 1FT. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company Limited. The Prudential Assurance Company Limited and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc which is a holding company registered in England and Wales with registered number 11444019 and registered office at 10 Fenchurch Avenue, London EC3M 5AG, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.