Finance Act 2004

168 Lump sum death benefit rule U.K.

(1) This is the rule relating to the payment of lump sum death benefits by a registered pension scheme in respect of a member of the pension scheme (“the lump sum death benefit rule”).

Lump sum death benefit rule

No lump sum death benefit may be paid other than—

(a) a defined benefits lump sum death benefit,

(b) a pension protection lump sum death benefit,

(c) an uncrystallised funds lump sum death benefit,

(d) an annuity protection lump sum death benefit,

[F1 (e) a drawdown pension fund lump sum death benefit,]

[F2 (ea) a flexi-access drawdown fund lump sum death benefit,]

(f) a charity lump sum death benefit [F3 , or]

F4 (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h) a trivial commutation lump sum death benefit, F5 ...

F5 (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In this Part “lump sum death benefit” means a lump sum payable on the death of the member [F6 , or a lump sum payable in respect of the member on the subsequent death of a dependant, nominee or successor of the member.]

(3) Part 2 of Schedule 29 gives the meaning of expressions used in the lump sum death benefit rule.

(4) Schedule 36 contains (in Part 3) transitional provision about lump sum death benefits.

Textual Amendments

F1 S. 168(1)(e) substituted (with effect in accordance with Sch. 16 paras. 85, 103 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 65

F2 S. 168(1)(ea) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 7

F3 Word in s. 168(1)(f) inserted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 18(a), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

F4 S. 168(1)(g) repealed (19.7.2007) (with effect in accordance with Sch. 19 para. 29(3) of the amending Act) by Finance Act 2007 (c. 11), Sch. 19 para. 5, Sch. 27 Pt. 3(1)

F5 S. 168(1)(i) and word omitted (for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2024 (c. 3), Sch. 9 paras. 18(b), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

F6 Words in s. 168(2) inserted (15.7.2015) by Finance (No. 2) Act 2015 (c. 33), s. 22(9)(13)

Modifications etc. (not altering text)

C1 S. 168 applied (with modifications) (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 14

C2 S. 168(1) modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 6, 8(1)(2)

Commencement Information

I1 Ss. 160-274, 281, Schs. 30-35 in force at 6.4.2006 but any power to make an order or regulations under those provisions may be exercised at any time after Royal Assent, see s. 284