It is generally accepted that a pension transfer, or significant payment into a pension scheme, will not normally have inheritance tax (IHT) consequences unless the transfer was made when the client was aware that they were in poor health and death occurs within two years of the transfer. 

HMRC lost a recent appeal case, HMRC v Representatives of Staveley (deceased) and the outcome of this appeal has changed the previously accepted IHT position.

Mrs Staveley transferred a S32 pension following an acrimonious divorce into a personal pension so her ex-husband could not benefit. The pension monies were designated to benefit her sons in the event of her death. She died shortly after the transfer was made and HMRC decided the transfer was chargeable for IHT. 

The HMRC decision was ultimately overturned because the Appeal Court found that the driver behind the advice was for her ex-husband not to benefit from the pensions and there was no intention to avoid IHT.