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Where Taxpayers and Advisers Meet

PENSION COMMENCEMENT LUMP SUM

Jeffers613
Posts: 4
Joined: Thu Nov 16, 2017 4:10 pm

PENSION COMMENCEMENT LUMP SUM

Postby Jeffers613 » Thu Nov 22, 2018 2:20 pm

I need to know whether the PCLS - if UNUSED (or not fully used) by a deceased defined-contribution scheme holder, can be utilised by a nominated (or other) beneficiary?

I have been told that the PCLS is a member-only benefit and therefore cannot be passed on - is this correct?

Does anyone have a reference in the HMR&C tax manual that the PCLS is a member-only benefit and is lost if unused by the pension holder?

Jeffers613
Posts: 4
Joined: Thu Nov 16, 2017 4:10 pm

Re: PENSION COMMENCEMENT LUMP SUM

Postby Jeffers613 » Fri Nov 23, 2018 3:40 pm

GOSH - 30 VIEWS AND NO REPLIES TO MY QUESTION!!!!

AdamS93
Posts: 219
Joined: Tue Sep 26, 2017 6:28 pm

Re: PENSION COMMENCEMENT LUMP SUM

Postby AdamS93 » Fri Nov 23, 2018 5:56 pm

GOSH - 30 VIEWS AND NO REPLIES TO MY QUESTION!!!!
It is a forum for free advice. No one is obliged to reply GOSH!

This isn’t something a general practitioner would see on a regular basis, therefore instead of guessing, forums users just haven’t replied!

We could research it, like you could, but I doubt anyone will do it for free - time is precious!

Sophie K
Posts: 6
Joined: Fri Dec 09, 2016 9:36 am

Re: PENSION COMMENCEMENT LUMP SUM

Postby Sophie K » Tue Dec 18, 2018 2:42 pm

PCLS is only available to the member: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm063220

PCLS is not an authorised lump sum death benefit and therefore is not available to beneficiaries: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm071000

So on the member's death there is no opportunity for the beneficiary to take PCLS, albeit if death is pre-75 then the whole benefits would be free of income tax.

Taking PCLS in lifetime would bring the lump sum into the estate for IHT purposes, so it's not always the most tax-efficient thing to do.


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