PSI11.2.17 - Benefits on Death in Service: Lump Sum Benefits - Refund of Contributions

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

[PN10.46]

A refund may be increased by interest. Such interest is regarded as part of the calculation of the benefit from the scheme and is not treated as true interest for tax purposes. The amount of interest to be paid can be left to the trustees and our only requirement is that it is reasonable. A rate equal to the rate of interest which accrued to the scheme over the relevant period or the bonuses paid on the initial sum assured may be regarded as reasonable.

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