Pension death benefits and the lifetime allowance - decision tree
16 September 2019
Key points
- Pension benefits that have already been crystallised won't be subject to further lifetime allowance (LTA) testing on death
- The LTA position can differ depending on the type of scheme, whether lump sum or pension death benefits are paid and also the timing of paying the benefits
- Lumps sums over the LTA are taxed at 55% on the excess
- Pensions over the LTA are taxed at 25% on the excess
- The beneficiaries are liable for any LTA tax due, unlike during the member's lifetime where the scheme would have paid it
Assumptions and limitations – The decision tree outcomes are based on a number of assumptions and are only illustrative. Standard Life does not accept any responsibility for any loss caused by reliance on this decision tree. This does not constitute financial or other professional advice from Standard Life. If you require tax or other professional advice you should consult a suitability qualified professional.