Tag Archives: pension death benefits

Pension death benefits and spousal bypass trusts: time to review

April 2015 saw another radical overhaul of the taxation of UK pensions on death.  Gone is the 55% tax charge on payment of a lump sum death benefit after death, if the pension member either died after their 75th birthday or died pre-75 having already entered into drawdown.  Instead, pension payments from a money purchase pension can now be paid to the member’s nominated beneficiary in the form of either a lump sum, annuity or flexi-access drawdown and no 55% charge is payable at that time.  The nominated beneficiary is taxed at their highest marginal rate of Income Tax in respect of any benefits received.  In addition, the nominated beneficiary can pass on any remaining funds tax free on their death. 

Read full article