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Introduction

On the death of a scheme member or a beneficiary, a registered pension scheme is only authorised to pay out benefits to a beneficiary either as a pension death benefit or as a lump sum death benefit.

The type of benefits paid will depend on the scheme rules and the type of arrangement from which the benefits are being paid.

As with the payment of benefits in a member’s lifetime, the legislation sets out the authorised forms of pension and lump sum death benefits that may be paid following a member’s death, the circumstances in which those benefits can be paid, and the conditions and restrictions that the payments of the benefits must meet or follow in order for them to be authorised.

These are referred to in the legislation as ‘the pension death benefit rules’ and ‘the lump sum death benefit rules’.

For the taxation of pension benefits, see the Pension income and lump sum allowances from 6 April 2024 guidance note. See also Simon’s Taxes, E7.239 and E7.239A.

Lump