The following Employment Tax guidance note Produced by Tolley in association with John Hayward provides comprehensive and up to date tax information covering:
The Taxation of Pensions Act 2014 made important changes to how money purchase pension funds can be dealt with following a member’s death. These changes apply to:
funds that have been designated to flexi-access drawdown but have not been withdrawn by the date of death
any remaining funds in capped drawdown
funds in defined contribution schemes which are yet to be crystallised
The changes are to the tax applicable which in many cases has now been eliminated altogether.
For the first time, and again it is emphasised only relating to defined contribution schemes, persons other than ‘dependants’ are able to inherit a member’s unused funds at death. The class of potential beneficiaries is now literally unlimited. Residual funds following death may be paid out in lump sum form or may be used as flexi-access drawdown funds on the part of the recipient. These changes apply where the first payment to the beneficiary (or beneficiaries) involved is on or after 6 April 2015.
The tax position changed from 6 April 2015 so that where a defined contribution scheme member dies before age 75 and benefits are paid out after 5 April 2015, benefits paid (whether in the form of lump sum or income) are free from income tax so long as they are dealt with within two years of the member’s death. These provisions take the form of amendments to the FA 2004 provisions made by the Taxation of Pensions Act 2014, Schs 1, 2.
The extent of potential beneficiaries with regard to ongoing income payments has become unlimited. It is no longer restricted to those where there is
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Statutory references to ITTOIA 2005 relate to unincorporated businesses and CTA 2009 relate to companies unless otherwise stated.Legal and other professional fees can represent substantial costs to a business. A detailed analysis is often required for the purpose of preparing tax computations as
IntroductionA company that is not resident in the UK will only be subject to UK corporation tax if it carries on a trade in the UK through a permanent establishment. Where it does so, it will be subject to UK corporation tax on all profits that are attributable to the UK permanent establishment.
RDEC ― large company R&D reliefSince 1 April 2016, or from 1 April 2013 by election, large company R&D relief is given through research and development expenditure credits (RDEC), which is a taxable credit payable to the company. As the credit is taxable, it is also sometimes called an above the
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every