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Mr Glen Hurstfield
Lawrence Graham LLP
4 More London Riverside
London
SE1 2AU 
							   		17 December 2007 

Dear Glenn,

Proposed Romeera Pension Scheme

Thank you for your letter dated 11 December 2007.

The proposed scheme provides no absolute benefits to any beneficiaries and contingent beneficiaries of the scheme, other than those benefits payable to the members of the scheme who have accrued an entitlement to pensions. The power of allocation and distribution of death benefits vests in the surviving trustees of the scheme. Whilst the expression of wishes form directs to whom the benefits on death should be paid, the surviving trustees are not bound to act in accordance with those wishes; although the fiduciary duties of trusteeship applies. 

Accordingly, Romee will have no absolute entitlement to benefits under the scheme on their deaths, it is up to the surviving trustees (delegated to the administrator) to decide the format and sums paid to Romee. The sole purpose of using a self administered scheme is that the “control” of the scheme can remain within the family circle; this does not apply with the existing arrangements, SIPPs operate under a master trust. 

The Mehtas’ Indian Wills have no bearing on the scheme, I mention the Wills only in the context that any nomination of beneficiary may be drafted taking into account the intentions as per the Mehtas’ Indian Wills. 

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The options for the distribution of death benefits on the assumption that Romee dies after age 75 are broadly:

•	Return of fund back to the scheme employer, less a 35% tax charge
•	Payment to a nominated charity without deduction of tax
•	Return of fund back to the Mehta’s estate

On the last point, scheme pension is not subject to IHT, although HMRC intend to tax these methods of pension payment in the forthcoming Finance Act 2008; they are a unique feature of occupational pension schemes – such as the proposed Romeera Pension Scheme. Having read through the draft regulations, there are a number of holes so it remains to be seem to what extent they will be effective as we have been down this road before with the Treasury.

I trust that this clarifies the discretionary position of the scheme. I believe that the requirements for Romee can be satisfied without any substantial amendments to the proposed trust deed and rules. I recommend however that you draft the nomination of beneficiary documentation, as our standard documentation will not be comprehensive enough for this exercise. I am happy to provide you with input on the requirements of HMRC, that may needed to be taken into account. I understand that there will be overall tax consequences to consider and Mr Goodyear will also be able to give his expert advice. 

Kind regards

Yours sincerely

Gavin McCloskey
For Pension Practitioner .Com 

c.c. 	Mr G Goodyear- Lubbock Fine
	Mr M Mehta