Cascading residual wealth to loved ones and future generations is possible with a pension and can be very tax efficient. Making nominations is important to ensure your client’s wishes to leave a legacy are clear. Without a nomination, the benefit options on death are more limited.
The CRA offers full death benefit flexibility.
Who can receive benefits on a member’s death?
- Any other beneficiary nominated by the member
- Any other beneficiary chosen at the discretion of the scheme administrator
- Anyone nominated by the member on their expression of wish
The scheme administrator cannot use their discretion to give flexi-access to anyone else if there is a nomination on file or a dependant exists.
||A generic term that can mean dependant, nominee or successor.
||Someone who is dependent on the member (i.e. spouse or child under 23).
||Anyone who is nominated on the member’s expression of wish (i.e. non-dependent child, grandchild, friend, local landlord etc).
||Anyone who succeeds a dependant or nominee.
Death benefit taxation
|Uncrystallised or crystallised
||Death before age 75
|| Death after age 75
| Lump Sum Death Benefit
|| Tax at beneficiaries’ marginal rate of tax**
| Beneficiary Drawdown
|| Tax at beneficiaries’ marginal rate of tax
* Subject to the Lifetime Allowance
** For a Trust (45%)/for a charity lump sum death benefit (conditions apply) tax-free
Need more information? Please contact your consultant or call our technical team on 02380 726 010 (between 8.00am and 5.00pm Monday – Friday).