SCHEDULES
SCHEDULE 1Pension flexibility etc
Part 5Miscellaneous amendments
Trivial commutation lump sum death benefits
74
1
Paragraph 20 of Schedule 29 to FA 2004 (trivial commutation lump sum death benefit) is amended as follows.
2
In sub-paragraph (1) (definition) for the words from “if” to the end substitute “
if condition A or B is met.
”
3
After sub-paragraph (1) insert—
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.
4
In sub-paragraph (2) (excess over £18,000 not a trivial commutation lump sum death benefit) for “£18,000” substitute “
£30,000
”
.
5
In consequence of sub-paragraph (4), in Schedule 18 to FA 2011 omit paragraph 6(2).
6
The amendments made by this paragraph have effect in relation to lump sum death benefits paid on or after 6 April 2015.