Pension transfer made in ill health

In 2000 as part of her divorce settlement Mrs S gave up her director role in the company she and her husband had built up. The company then granted her a pension in the form of a s 32 buyout policy (FA 1981 s 32). This would allow her to invest the fund as she chose – but any surplus would be returned to the company on her death. This was significant because her pension was overfunded.

Mrs S wished to ensure the surplus would benefit her sons but was told she would have to wait ten years before she could transfer the fund to a personal pension.

As a result of a change in the law in April 2006 her adviser said she could effect the transfer after six years. Mrs S was now terminally ill but in October 2006 within two months...