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How are pension funds taxed on death? DAVID SEATON explains the rules that apply
KEY POINTS
- The implications of crystallising funds at age 75.
- Taxing the scheme after death while receiving an alternatively secured pension.
- The use of scheme pension funds after death.
- The tax treatment of authorised and unauthorised payments.
- Payments to charities and unconnected persons.
The days of pension schemes being exempt from tax disappeared with the Finance Act 2004. To make it more complex that act has been amended in every subsequent finance act. The most amended section relates to what happens to any pension fund the member might leave on death.
The Government appears to have been fixated by the idea that someone who dies while drawing a pension could leave remaining funds to their beneficiaries.
We can leave our worldly assets to our heirs ...
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