Chapter PTM073900
| Published date | 27 March 2015 |
| Record Number | PTM073900 |
| Glossary | PTM000001 |
Conditions for paying a charity lump sum death benefit
To whom a charity lump sum death benefit can be paid
The maximum charity lump sum death benefit payable
A charity lump sum death benefit and the lifetime allowance
How a charity lump sum death benefit is taxed
Paragraph 18 Schedule 29 Finance Act 2004
These are the payment conditions for lump sums paid in respect of someone who died on or after 6 April 2011. For guidance relating to payments made in respect of a member or beneficiary who died before 6 April 2011 see RPSM10105300 on the National Archives.
Broadly a charity lump sum death benefit is a lump sum paid to a charity if:
- a member receiving a drawdown pension, or
- a beneficiary getting a beneficiary’s drawdown pension
dies and there are no dependants of the member.
The payment conditions vary slightly depending on whether the payment is made following the death of a member or the death of a beneficiary (dependant, nominee or successor).
Payment following a member’s death of the memberA lump sum paid following the member’s death is a charity lump sum death benefit if:
- it is paid from a money purchase arrangement (including a cash balance arrangement)
- it is paid to a charity nominated by the member, and
- at the time it is paid there are no dependants of the member.
The payment must come from the member’s remaining:
- drawdown pension fund (see PTM062500)
- flexi-access drawdown fund (see PTM062700), or
- ‘relevant uncrystallised funds’.
Before 16 September 2016 for payments from ‘relevant uncrystallised funds’ to be a charity lump sum death benefit the member was required to be 75 or older when the died.
‘Relevant uncrystallised funds’ are funds held in a money purchase arrangement at the member’s death which have not been:
- used to purchase a scheme pension, a lifetime annuity, dependants’ scheme pension, dependants’ annuity or nominees’ annuity, or
- designated as available to pay drawdown pension.
A lump sum paid following the death of a beneficiary is a charity lump sum death benefit if:
- it is paid on the death of a dependant, nominee or successor,
- it is paid from a money purchase arrangement (including a cash balance arrangement)
- at the time it is paid there are no dependants of the member, and
- it is paid to a charity nominated by the member. If the member did not select a charity it is paid...
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