Options And Tax Treatment Of davids Pension Death Benefits Flashcards
1
Q
Tax treatment of Davids pension plans death benefits
A
DB SCHEME
- only option will be 50% spousal pension
- taxed as June’s income
- even if David dies before 75
SIPP
- a lump sum
- or a dependents FAD
- or a lifetime annuity
- tax free if David dies before 75
- and payment takes place within 2 years of Davids death
- otherwise taxed as June’s income
STATE PENSION
- income - tax as June’s
- lump sum - taxed at June marginal rate
- can not push her into higher rate band though
No test against Davids LTA
Outside of the estate for IHT
