RPSM10105550 - Technical Pages: Death benefits: Lump sums: Member dies before or after age 75: Taxation of pension guarantee

Taxation of the payment of a pension guarantee in existence on 5 April 2006

Member dies age 75 or over

If the member is age 75 or over when they die the 35% special lump sum death benefit charge (see RPSM04101110) will not apply to the lump sum death benefit whilst the amount paid remains within the transitional protection limit. (See RPSM10105540 for details of the transitional protection limit.)

Any amount paid over the transitional protection limit will be an unauthorised payment and taxed accordingly.

Member dies before age 75

Where the member dies before age 75 the part of the

• pension protection lump sum death benefit,
• annuity protection lump sum death benefit or
• unsecured pension lump sum death benefit

that represents payment of the pension guarantee in existence on 5 April 2006 will not be liable to the 35% special lump sum death benefit charge if it is within the transitional protection limit.