UK Death Tax Reduction Confirmed
05 August, 2015
While already proposed as part of the 2o14 Autumn Budget, it has been confirmed that the UK tax charge that applies to certain lump sum death benefits from pension schemes will change from the current 45% tax charge (reduced from 55% in April 2015) to a beneficiary’s marginal UK income tax rate if the payment is made on or after 6 April 2016. The payment will be treated as pension income of the beneficiary. The tax charge on death benefit lump sums normally applies when a person dies after age 75. If a person dies before the age of 75, payments on or after 6 April 2015 are normally free of UK tax.