Finance Act 2004

Defined benefits and money purchase arrangements U.K.

Trivial commutation lump sum death benefit U.K.

20 (1) A lump sum death benefit is a trivial commutation lump sum death benefit [F1 if condition A or B is met.] U.K.

[F2 (1A) Condition A is that the lump sum—

(a) is paid to a dependant entitled under the pension scheme to pension death benefit in respect of the member, and

(b) extinguishes the dependant's entitlement under the pension scheme to pension death benefit and lump sum death benefit in respect of the member.

(1B) Condition B is that—

(a) the lump sum is paid after the member's death to an individual entitled to be paid a pension under the scheme—

(i) which the member was entitled to be paid immediately before the member's death, and

(ii) which is payable to the individual under pension rule 2 (see section 165),

(b) if the pension is an annuity or scheme pension payable by an insurance company, the lump sum extinguishes all entitlements in respect of the member under the contract concerned, and

(c) if the pension is a scheme pension payable by the scheme administrator, the lump sum extinguishes all entitlements to receive a scheme pension in respect of the member from the scheme administrator under pension rule 2.]

(2) But if the amount of a lump sum falling within sub-paragraph (1) exceeds [F3 £30,000], the excess is not a trivial commutation lump sum death benefit.

[F4 (3) The Treasury may by order substitute for the amount for the time being specified in sub-paragraph (2) such larger amount as is specified in the order.]

Textual Amendments

F1 Words in Sch. 29 para. 20(1) substituted (17.12.2014) (with effect in accordance with Sch. 1 para. 74(6) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 74(2)

F2 Sch. 29 para. 20(1A)(1B) inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 74(6) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 74(3)

F3 Sum in Sch. 29 para. 20(2) substituted (17.12.2014) (with effect in accordance with Sch. 1 para. 74(6) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 74(4)

F4 Sch. 29 para. 20(3) inserted (with effect in accordance with Sch. 18 Pt. 2 of the amending Act) by Finance Act 2011 (c. 11), Sch. 18 para. 6(3)

U.K.

F5 21 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F5 Sch. 29 para. 21 omitted (17.12.2014) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 75(1)