PSI11.2.25 - Benefits on Death in Service: Lump Sum Benefits Disposal Of Death Benefit Within 2 Years

(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)

[PN11.5]

Normally there is no difficulty in identifying the beneficiaries to whom the lump sum is to be paid and payment is usually made shortly after the employee's death. Sometimes, however, the administrator finds it difficult to determine or locate the beneficiary and the money remains within the scheme and continues to attract tax reliefs. There is a limit on the length of time we will permit the money to be held in this way. If the lump sum cannot be distributed within 2 years of the member's death it must be withdrawn from the scheme and held under separate trusts in favour of the ultimate beneficiaries; or be paid to the deceased member's personal representatives.

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