RPSM10300030 - Scheme Administrator Pages: Death benefits: Authorised and unauthorised member payments

How are unauthorised member payments taxed?

Any payment made by a registered pension scheme (whether actual or deemed) that is an unauthorised member payment attracts a specific income tax charge called the unauthorised payments charge. The charge is made at a rate of 40% based on the amount of the unauthorised member payment. This does not change where the payment is made following the death of 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.

Unauthorised payments surcharge

When 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 when the member is alive (see RPSM04104600).