HM Revenue & Customs (HMRC) considers withdrawals taken from alternatively secured pensions (ASP) or unsecured pensions (USP) as income for inheritance tax (IHT) purposes, it has announced. As such, consumers who have excess income from USP or ASP that they do not spend can give it away without incurring any IHT charges. Head of tax and financial planning at financial firm Skandia Colin Jelley commented: “Where HMRC practice has not generally been known, we welcome the introduction of greater clarity. “Advisers can now be clear on exactly where their clients in USP or ASP stand, and therefore make plans accordingly.” Consequently, a gift is exempt from IHT if it was made as part of the normal expenditure of the individual making the transaction, if it was made out of income and after allowing for all such gifts which are made out of normal spending, the giver if left with enough to maintain their usual standard of living. For the tax year 2007-08, the IHT nil rate band stands at £300,000.