This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

IHT on pension lump sum

Cloisters
Posts:48
Joined:Fri Oct 14, 2016 5:37 pm
IHT on pension lump sum

Postby Cloisters » Mon Jul 01, 2024 6:52 pm

I am trying to get confirmation that a DC pension lump sum paid on death is not taxable but no one will confirm one way or the other so would appreciate thoughts on the position or how I can get confirmation.

My sister in law died suddenly aged 60 (never married) having retired shortly before. She had a pension nomination in favour of her mother (that she nominated 40 years ago), but her mother is now 91 and does not want the money, but asked for it to go to her remaining children equally to bypass her own estate which would otherwise make the lump sum liable to IHT on her own death.

The pension company trustees decided to pay it to the the administrator of the estate on this basis.

My assumption as the administrator is that I am simply being used as a conduit to distribute the funds per the will i.e. to the residual beneficiaries which are the siblings of the deceased.

I further believe that the pension lump sum is not part of the deceased's estate and therefore not subject to IHT. The trustees had full discretion on who to pay the monies to.

Thanks in advance.

pawncob
Posts:5124
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: IHT on pension lump sum

Postby pawncob » Mon Jul 01, 2024 7:39 pm

https://om.uk/insight/pensions-inheritance/
With a pinch of salt take what I say, but don't exceed your RDA


Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”

cron