Part 4: Income tax, corporation tax and capital gains tax Section 22: Pensions: some lump sum death benefits taxed as pension income Details of the section
Subsection (2) inserts new subsections (4) and (4ZA) in section 636A of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003.
	New subsection (4) provides that taxable lump sum death benefits paid to a non-qualifying person are subject to the 45% special lump sum death benefits charge in section 206 of Finance Act (FA) 2004. This charge is the liability of the scheme administrator. These lump sums are not subject to any other income tax charge.
	New subsection (4ZA) provides that taxable lump sum death benefits paid to a qualifying person are taxed as pension income of the recipient under section 579A of ITEPA 2003.
	Subsection (4) inserts new subsection (8) in section 636A of ITEPA 2003.
	New subsection (8) uses the same definition for 'non-qualifying person' as set out in section 206 of FA 2004 and defines a 'qualifying person' as an individual who receives a lump sum death benefit and is not a non-qualifying person.
	Subsection (5) inserts new section 636AA of ITEPA 2003.
	New subsections (2) to (5) set out certain types of taxable lump sum death benefits where:
	The pension holder died having reached age 75; or
	The pension holder died under age 75 but the lump sum was not paid out within two years of the scheme administrator becoming aware of the death (this part of the rule does not apply to annuity protection lump sum death benefits and pension protection lump sum death benefits).
	Subsections (6) and (7) amend section 579CA of ITEPA 2003 (both for years of departure from 2013-14 onwards and for earlier years of departure). Section 579CA lists the relevant withdrawals that are taxable if taken when an individual is resident outside the UK but returns within five tax years of becoming non-resident. These subsections add lump sum death benefits taxable as pension income to the list of relevant withdrawals.
	Subsection (8) makes sure that where payments that are the equivalent of taxable lump sum death benefits or uncrystallised funds pension lump sums are paid from a relevant non-UK scheme, they will not be subject to PAYE processes so tax is not deducted at source by the scheme manager of the non-UK pension scheme.
	Subsection (9) amends section 168 of FA 2004 to clarify beyond doubt that the definition of lump sum death benefit extends to a lump sum paid on the death of a dependant, nominee or successor.
	Subsection (10) adds the tax charge on lump sum death benefits paid directly to an individual to the list of UK tax charges in paragraph 1 of Schedule 34 to FA 2004 that apply when a payment is made from a non-UK pension scheme that has received UK tax relief (a relevant non-UK scheme).
	Subsection (11) makes consequential amendments to Schedule 16 of FA 2011 which had amended the rules on the exemption for lump sum death benefits in section 636A of ITEPA 2003.
	Subsection (12 ) states what the subsections (2) to (8), (10) and (11) apply to
	Subsection (13) explains that the amendment in subsection (9) is to be treated as having come into force on 15 July 2015.