Non-taxable pension death payments to be reported in real time

New regulations require pension payers to report to HMRC specified types of non-taxable payments using real time information.

The payer - the employer – will have to report payments made after the death of a pension scheme member where those payments are not taxable. ‘Relevant payments’ include the following to the extent that they are not PAYE pension income:

• pension amounts payable after the death of the member;
• pension benefits payable to dependants of the scheme member; and
• some lump-sum death payments.

Pension payers are already required to send to HMRC similar information for payments subject to PAYE the regulations extend this requirement to payments of non-taxable payments.

The aim of the measure is to ensure that HMRC has complete information about taxable and non-taxable payments so that individuals pay the correct income tax and receive their correct entitlement to means-tested benefits from the Department for Work and...