PART V MISCELLANEOUS RELIEFS

CHAPTER V MISCELLANEOUS

Pension schemes, etc

F1151DUnauthorised payment where person dies over 75 with pension or annuity

1

This section applies where—

a

a member of a registered pension scheme, or a dependant of such a member, dies after reaching the age of 75;

b

immediately before death the member or dependant has under the pension scheme an actual right to payments under a relevant pension or relevant annuity or a prospective right to payments under a relevant pension; and

c

at any time after the death a relevant unauthorised payment is made by the pension scheme.

2

Where this section applies tax shall be charged under this section.

3

The amount on which tax is charged under this section shall be the difference between—

a

the amount of the relevant unauthorised payment; and

b

the amount of any liability to income tax which has arisen under Part 4 of the Finance Act 2004 by virtue of the making of the relevant unauthorised payment.

4

In this section—

  • “dependant” has the meaning given by paragraph 15 of Schedule 28 to the Finance Act 2004;

  • “dependants' annuity” has the same meaning as in that Part of that Act (see paragraph 17 of that Schedule);

  • “dependants' scheme pension” has the same meaning as in that Part of that Act (see paragraph 16 of that Schedule);

  • “lifetime annuity” has the same meaning as in that Part of that Act (see paragraph 3 of that Schedule);

  • “relevant annuity” means a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme;

  • “relevant pension” means a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme;

  • “relevant unauthorised payment” means an unauthorised payment (within the meaning of Part 4 of the Finance Act 2004: see section 160(5) of that Act) which—

    1. a

      consists of the payment of a lump sum in respect of the dead member or dependant; or

    2. b

      is treated as made by virtue of the operation of section 172B of that Act by reason of the death; and

  • “scheme pension” has the same meaning as in Part 4 of that Act (see paragraph 2 of Schedule 28 to that Act).