The family of Robert Dewar, who passed away in 2019, is facing significant financial implications related to a pension scam involving Norton Motorcycles. Dewar was misled into transferring his retirement savings into what was later identified as a fraudulent pension scheme. As a result, his widow, Susan, anticipated inheriting his pension without tax liabilities, as is customary for spouses of individuals who die before age 75. However, due to a specific clause in HM Revenue and Customs (HMRC) regulations, the £114,000 compensation awarded will incur around £50,000 in taxes because the payment was not processed until five years after his death.
The Dewars’ daughter, Sally Holmes, stated that after her father moved his pension to what seemed to be a legitimate investment, their recourse was limited to the Fraud Compensation Fund (FCF). The prolonged process to secure this compensation has led to the current tax charge, highlighting the complexities within the regulatory framework.
This case highlights a broader issue stemming from a “pensions liberation fraud” that affected over 200 individuals between 2012 and 2013, resulting in the misappropriation of approximately £11.5 million from various retirement plans. The funds were largely directed into three pension schemes linked to Stuart Garner, the former owner of Norton, who later pleaded guilty to illegally using the pension savings for his businesses. Garner received an eight-month suspended prison sentence and insists he, too, was a victim of the initial fraud.
In recent years, the FCF distributed £9.4 million to the impacted retirement schemes. An HMRC spokesperson emphasized that death benefits are generally tax-free only if claimed within two years of the pension scheme becoming aware of the death, a stipulation that leaves little room for exceptions, even in tragic circumstances.
Source: https://www.theguardian.com/politics/2025/oct/11/norton-motorcycles-pension-scandal-victims-widow-to-lose-almost-half-of-payout-tax-rule