Members do not have separate protection, whether primary or
enhanced, for death benefits. However where an individual who has
current protection for their pension and/or lump sum benefits dies
there might be protection or a degree of protection from the
lifetime allowance on any lump sum death benefits
paid.
The only death benefits that are
benefit crystallisation events (and so could be
liable to the
lifetime allowance charge) are a
defined benefits lump sum death benefit and an
uncrystallised funds lump sum death benefit. All
other death benefits are not liable to the lifetime allowance
charge as their provision is not a benefit crystallisation event.
RPSM03109000 gives details of how
and to what extent death benefits may be protected from the
lifetime allowance charge where a member has primary or enhanced
protection.
Where a member’s primary or enhanced protection does
not fully protect the payment of a lump sum death benefit from the
lifetime allowance charge the recipient on the benefit will be
liable to the lifetime allowance charge. However in certain
circumstances the recipient of the lump sum death benefit may be
able to notify HMRC of their right to an increased level of primary
or enhanced protection.
RPSM03109000 and following pages
explain how this process works.
| Glossary ( RPSM20000000) |
