Inheritance Tax Act 1984 section 153

Overseas pensions

Section 153 provides that certain overseas pensions are excluded from a person's estate for inheritance tax purposes, and sets out rules for treating various pension payments as if they had been made by an overseas government.

• Pensions payable under funds governed by the Government of India Act 1935 or corresponding schemes under the Overseas Pensions Act 1973 are left out of account when valuing a deceased person's estate for inheritance tax.
• Various categories of pension — including those paid under the Pensions (India, Pakistan and Burma) Act 1955, colonial government pension funds, and the Central African Pension Fund — are treated as if paid by the relevant overseas government rather than a UK source.
• The term "pension" is broadly defined to include gratuities, sums payable on death, and returns of contributions with interest, ensuring the exemption covers a wide range of overseas pension-related payments.
• Where the UK Government has assumed responsibility for an overseas pension under section 1 of the Overseas Pensions Act 1973, the pension continues to be treated as if paid by the original overseas government or fund, excluding any statutory increases under the Pensions (Increase) Act 1971.