I spoke to an IFA recently ans he was adamant that draw downs from SIPPs is income included the 25% TFLS. I challenged him on it because I never read anything to confirm this even from HMRC, but he was still sure. I think he was chatting shit like a lot of IFAs do.

I suspect that this could all end up being a wild goose chase and nothing will ever come about to confirm it.

Except of course actual examples which probably a probate specialist or solicitor is best placed to answer based on actual cases.

Makes sense. Will do the same re parents drawing down to gift.

The question of 25% TFLS being also income remains but in any case if will be gifted so it is either the 7 year rule or excess income (the later used if death before 7 years).

The other question I had in mind is how regular (in terms of length of time needed to do this) and does the income need to be steady or can it be lumpy? Reason being is because one of my parents has a much smaller pension than the other. Unfortunately the smaller pension parent also has a lot more income potential at 20%.

Then there is the question of whether the income is apportioned according to how much from respective parents is drawn down. If it both hits a joint account and then gifted from I suppose it does not matter?

You have made three important points here; for what it's worth, this is the information I've been able to garner about them.

Regarding the TFLS, I suspect the following would be correct:
1. If you take the TFLS with regular drawdown income (ie, each payment of drawdown includes the 25% TFLS) then you can call the whole payment applicable income for Gifting from Surplus Income purposes.
2. However, if you take out the entire TFLS in one go, you would not be able to make regular gifts from that every year. Given that HMRC demands that gifts need to be seen as part of a regular pattern, that would fall foul of their regulations.
If you do want to gift a lump sum, I would suggest looking at what I am doing and buying a term life insurance to cover the IHT due on that gift.

HMRC accept that payments do not have to be exactly the same every year, as both income and expenditure can fluctuate, but the intention should be there. For example, a letter to your beneficiaries stating what you plan to do - and possibly why (in my case, paying nursery fees for grandchildren), will establish intention. There was a court case where HMRC had to accept gifting that only lasted one year because the benefactor had written what she was going to do, but then died before more gifts could be made.
Obviously keep any records (including spreadsheets of income/expenditure and correspondence) for your executers, and update annually.

Your last point is something that has been bothering me: As Gifting from Surplus Income is presented to HMRC after a death of one person, how can it be split between two benefactors? How would HMRC be expected to work out if it is all OK when they do not have details of surviving partner?
And how is household expenditure worked out for these purposes? - 50/50, or according to respective incomes?
I have no answer to this point and will probably have to consult an expert in the field - if I can find one!

On your final para, I would imagine spending would be 50-50 but that is a total guess (so half of the total spending for the couple would be entered int he IHT403 form). For income, looking at the IHT403 form, it asks for the break down of the income received by the deceased person for each of the tax year the claim is made for. So it does look like, to me at least, the excess income is possible if the deceased's income alone is more than the 50% (or x%) share in the expenses. But these things still need confirming (expenses split 50-50 for e.g. and income reported only that is received by the deceased person).

Why would spending be 50:50? I have a much bigger pension than my wife it would be impossible for her to fund 50% of our outgoings. So I envisage filling in the form and having 70% of our outgoings on the form but drawing down 75% from the SIPP. I gift 5% but all out of income as I can't do it out of capital. My wife covers the remaining 30% of spend but needs a capital transfer from me to achieve it.

But this is where it gets very opaque. If i give my wife £15K per year to spend, out of my capital (ISA) on household outgoings but in her name I can see nothing which will stop me doing this and still being able to claim excess income gifting as capital transfers between spouses is unlimited and tax free with no stipulation on how you spend it.

If it was 50:50 as you suggested I could gift masses more but that is not representative of how we would operate our combined finances

Can anyone see an issue with this?

On the points raised by the last two posters, I have decided that the question of how income and expenditure are divided between 2 members of a household (and indeed if we can combine them or each has to effectively gift from surplus income individually) is too important to me to leave to informed guesswork.
I am arranging a consultation with a specialist tax accountant (via my solicitor, who has used them for some time,).
Hopefully this will be worth the expense.

If I get any definitive answers I will post them, but this will take a few weeks.