Trust on Pension Death Benefits
Redawg31
Member
Hi Quick question on pension death benefits.
Can someone over 75 set up a Trust for death benefits on a pension so that the beneficiaries do not have to pay income tax.after death.
I would imagine the answer is no otherwise everyone would do it.
thanks in advance.
Comments
No.
If the pension gets paid out to a discretionary trust after 75, income tax at 45% would be payable.
But note that when paid on to an individual beneficiary, it can carry a 45% tax credit.
Pru has a good technical article on this.