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The revised treatment of pension death benefits
KEY POINTS
- The new rules on flexible access to pension funds will provide new tax-planning opportunities.
- The extent to which pension funds will be subject to tax in the hands of beneficiaries will depend on the scheme member’s age at death.
- A 45% special lump sum death benefit charge may apply if payment is delayed for more than two years after death.
- The range of those who may benefit from a deceased scheme member’s pension fund is now much wider.
- Inheritance tax changes may affect whether a bypass trust is required to receive the scheme benefits.
Readers cannot fail to have noticed that the rules on pension plans are changing. Flexi-access pensions will allow greater flexibility in accessing money purchase (defined contribution) pension funds in the future.
As part of the...
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