RPSM10100120 - Technical Pages: Death benefits: Overview: Taxation of unauthorised member payments

Taxation of an unauthorised member payment made following the death of the member

Any payment made (whether actual or deemed) that is an unauthorised member payment attracts a specific income tax charge, at the rate of 40% (the unauthorised payments charge). This does not change where the payment is made following the death of the member. However, where the payment is made after the member has died the charge falls on the recipient of the payment, rather than the member.

The taxation of unauthorised member payments is dealt with in more detail in RPSM04104020.

Surcharge on an unauthorised member payment

Where an unauthorised member payment is made following the death of the member that payment may become subject to a surcharge called the unauthorised payments surcharge, just as where such a payment is made whilst the member is alive (see RPSM04104600).

A scheme sanction charge

Similarly, the making of an unauthorised member payment following the death of the member may also lead to the imposition of a scheme sanction charge on the scheme administrator (see RPSM04104800).