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HMRC internal manual

Inheritance Tax Manual

Pensions: IHT charges: death benefits cash options

IHTA84/s152 provides that where an annuity becomes payable under:


  • a surviving spouse or civil partner or
  • a dependant

of the deceased and, under the terms of the scheme, the deceased had the option for the scheme to make a lump sum payment to the personal representatives the deceased is not treated as beneficially entitled to that sum. So there is no amount chargeable to IHT. If there is an option to have a lump sum paid to persons other than the personal representatives, this does not apply.