Paragraph 20

United Kingdom

(1)

A lump sum death benefit is a trivial commutation lump sum death benefit F1if condition A or B is met.

F2(1A)

Condition A is that the lump sum—

(a)

is paid to a dependant entitled under the pension scheme to pension death benefit in respect of the member, and

(b)

extinguishes the dependant's entitlement under the pension scheme to pension death benefit and lump sum death benefit in respect of the member.

(1B)

Condition B is that—

(a)

the lump sum is paid after the member's death to an individual entitled to be paid a pension under the scheme—

(i)

which the member was entitled to be paid immediately before the member's death, and

(ii)

which is payable to the individual under pension rule 2 (see section 165),

(b)

if the pension is an annuity or scheme pension payable by an insurance company, the lump sum extinguishes all entitlements in respect of the member under the contract concerned, and

(c)

if the pension is a scheme pension payable by the scheme administrator, the lump sum extinguishes all entitlements to receive a scheme pension in respect of the member from the scheme administrator under pension rule 2.

(2)

But if the amount of a lump sum falling within sub-paragraph (1) exceeds F3£30,000, the excess is not a trivial commutation lump sum death benefit.

F4(3)

The Treasury may by order substitute for the amount for the time being specified in sub-paragraph (2) such larger amount as is specified in the order.

Annotations

Textual amendments

F1: Words in Sch. 29 para. 20(1) substituted (17.12.2014) (with effect in accordance with Sch. 1 para. 74(6) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 74(2)
F2: Sch. 29 para. 20(1A)(1B) inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 74(6) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 74(3)
F3: Sum in Sch. 29 para. 20(2) substituted (17.12.2014) (with effect in accordance with Sch. 1 para. 74(6) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 74(4)
F4: Sch. 29 para. 20(3) inserted (with effect in accordance with Sch. 18 Pt. 2 of the amending Act) by Finance Act 2011 (c. 11), Sch. 18 para. 6(3)

Notes on Schedule 29

Modifications

C1: Sch. 29 modified (6.4.2006) by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207), regs. 1(1), 15 (as amended: (13/8/2009) by S.I. 2009/2047, regs. 1(1), 2-10; (with effect in accordance with reg. 1(3) of the amending S.I.) by S.I. 2012/1795, regs. 1(1), 6; (with effect in accordance with Sch. 1 para. 96(16)(a) of the amending Act) by 2014 c. 30, Sch. 1 para. 96(3)-(14) (with Sch. 1 para. 96(16)(b)); and (for the tax year 2024-25 and subsequent tax years) by 2024 c. 3, Sch. 9 paras. 62(6), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4); and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 22(2))
C2: Sch. 29 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), art. 23C (as inserted (1.6.2009) by S.I. 2009/1172, arts. 1, 3 (as amended (with effect in accordance with s. 42(9) of the amending Act) by Finance Act 2014 (c. 26), s. 42(5); and by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 72(1) (with Sch. 1 para. 72(2)(b)); and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 25(14))

Notes on Part 2

Modifications

C1: Sch. 29 Pt. 2 applied (with modifications) (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 14
C2: Sch. 29 Pt. 2 modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 6, 8(1)(3)