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Rowanmoor SSAS

Death Benefits

Member dies before taking benefits or whilst receiving income drawdown
Member dies whilst receiving scheme pension
Member dies whilst receiving an annuity

The death benefits, which can be paid when a member dies vary, depending on the member’s age when they die.

Death benefits will be paid to a member’s nominated beneficiaries, who may be dependants, nominees or successors, at the discretion of the trustees.

Member dies before taking benefits or whilst receiving income drawdown

If a member dies, the total value of their SSAS fund and any other pension arrangements they have will be tested against the current lifetime allowance.

Death Before Age 75

In the event of the death of a member before age 75 their funds, up to the current lifetime allowance, can be paid, tax-free as a lump sum.

Alternatively, the whole of the fund, up to the lifetime allowance, may be used to provide beneficiaries’ pensions tax-free. Pension benefits may be taken as follows:

Death from age 75

If a member dies at, or after, age 75 their fund can be paid to their beneficiaries as a lump sum taxed at the recipient’s marginal rate of income tax. If the beneficiary is not an individual, for example a trust fund or a company, a 45% tax rate will apply.

Alternatively, the member’s funds may be used to provide beneficiaries’ pensions. Any beneficiaries’ pensions will be taxed as earned income. Pension benefits may be taken as follows:

  • beneficiaries’ flexi-access drawdown;
  • beneficiaries’ scheme pension;
  • beneficiaries’ lifetime annuity.

OR

If there are no dependants, the death benefits can be given to a charity, tax-free.

If an individual receiving beneficiaries’ flexi-access drawdown income dies, the same death benefits will be available for their nominated beneficiaries, known as successors. Tax treatment of payments to successors will depend on whether the first beneficiary died before reaching age 75 or not; not the age of the original member at the time of their death. If the successor dies and funds still remain available, the same options are available to their successors and tax treatment is dependent on their age at death.

Member dies whilst receiving a scheme pension

Benefits can continue to be paid to a member’s beneficiaries until the end of any guarantee period, subject to income tax. After any payments in the guarantee period, benefits may be taken as follows:

  • cash lump sum to the beneficiary to the maximum of the original fund less any pension payments already paid, tax free if the member dies before age 75, or paid less tax at the recipient’s marginal rate of income tax from age 75;
  • dependant’s flexi-access drawdown, taxed as per the cash lump sum;
  • dependant’s scheme pension, subject to income tax;
  • dependant’s lifetime annuity, subject to income tax.

Dependant’s pensions that exceed the annual payment the member was receiving from their scheme pension may be subject to an additional tax charge.

All death benefits are payable at the discretion of the trustees and subject to available funds.

Member dies whilst receiving an annuity

For lifetime and short-term annuities death benefits will vary and will be based upon the options selected by the member when buying their annuity.

This information relates to the Rowanmoor SSAS. If you would like to know more details regarding the information provided on this page please send your questions via the enquiry box on the right hand side or email us. Alternatively please visit our SSAS literature library.

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