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HMRC internal manual

Pensions Tax Manual

Information and administration: information the scheme administrator must automatically provide following the member’s death

Glossary PTM000001
   

Information that the scheme administrator must automatically provide to personal representatives about lump sum death benefits
Information that the scheme administrator must automatically provide to personal representatives about BCE 5C or BCE 5D
Information that the scheme administrator must provide to trustees about the special lump sum death benefits charge

Information that the scheme administrator must automatically provide to personal representatives about lump sum death benefits

Regulation 8 The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567

Following a member’s death a scheme administrator must provide certain information to the member’s personal representatives.

If a pension scheme pays a

  • a defined benefits lump sum death benefit, or
  • an uncrystallised funds lump sum death benefit

following the member’s death the scheme administrator must provide information about the lump sum payment. This information must be provided automatically to the deceased member’s personal representatives within three months of the final such payment being made.

The information that must be provide to the deceased member’s personal representative is:

  • the amount of the lump sum
  • the payment date, and
  • the percentage of the standard lifetime allowance used up by the payment of the lump sum

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Information that the scheme administrator must automatically provide to personal representatives about BCE 5C or BCE 5D

As explained in PTM088660 the designation of uncrystallised funds to provide a dependant’s or nominee’s flexi-access drawdown fund may be a BCE 5C, or a person becoming entitled to a dependants’ or nominees’ annuity from unused uncrystallised funds may be a BCE 5D.

Where the designation of funds to provide either a dependant’s or nominee’s flexi-access drawdown fund is a BCE 5C, or where a person becoming entitled to a purchased dependants’ or nominees’ annuity is a BCE 5D, the scheme administrator must provide information about the event to the deceased member’s personal representative within three months of the event.

The information that must be provided on the BCE 5C is:

  • the amount designated
  • the date of designation, and
  • the percentage of the standard lifetime allowance used up by the BCE 5C.

 

The information that must be provided on the BCE 5D is:

  • the amount or market value of assets applied to the purchase of the annuity
  • the date the person became entitled to the annuity, and
  • the percentage of the standard lifetime allowance used up by the BCE 5D.

 

Guidance on calculating the total percentage of standard lifetime allowance crystallised for the purposes of providing information under this provision is at PTM164400. Note that there are special rules for members who had fixed protection, fixed protection 2014, fixed protection 2016, individual protection 2014 or individual protection 2016.

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Information that the scheme administrator must provide to trustees about the special lump sum death benefits charge

Regulation 10A The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567

Section 206(8) Finance Act 2004

Certain lump sum death benefits are taxable.  When they are paid to a trust, rather than an individual, and it is not a bare trust, the scheme administrator is liable to pay the special lump sum death benefits charge.  Individual beneficiaries of the trust who indirectly receive part of that lump sum in the form of a payment out of the trust may be able to claim a refund of some or all of the tax paid by the scheme administrator. To do so they will need information on the tax paid by the scheme administrator and the amount of the lump sum they received before tax was deducted as this is the figure on which they will have to pay tax (see PTM073010).

When the scheme administrator is charged the special lump sum death benefits charge on a payment on or after 6 April 2016 to a trustee (who is not a bare trustee) they must tell the trustee within 30 days starting with the date of  payment of the lump sum death benefit:

  • the amount of the lump sum death benefit on which tax has been charged,
  • the amount of that special lump sum death benefit charge,
  • the name and pension scheme tax reference number of the registered pension scheme, and
  • the name, date of birth and date of death of the member of the pension scheme in respect of whom the lump sum death benefit is paid.

 

The trustee is then required to pass on certain information to the trust beneficiary when the trustee makes onward payment of the lump sum death benefit (see PTM165400).