Introduction Background Note
63.These changes were announced at Autumn Statement 2014 and are supplementary to the changes made in the Taxation of Pensions Act 2014 (TOPA 2014) which have effect from 6 April 2015. TOPA 2014 provides that individuals aged 55 or over can access their money purchase pension savings as they choose from 6 April 2015. Individuals will therefore be able to take as little or as much as they want each year from their tax relieved pension savings. TOPA 2014 also makes a number of changes in connection with what benefits can be paid on the death of a member, who can receive these and how these are taxed. It also provides that payments of income withdrawal paid as a pension death benefit can be paid tax-free, where the member dies before age 75. Where there are unused funds in the beneficiaries’ drawdown at the time of their death, these can also be paid as a tax-free drawdown to a further beneficiary, if the previous beneficiary died before age 75.
64.The changes made by this section and Schedule extend the provisions in TOPA 2014 relating to income withdrawal payments on the death of the member so that they also apply to annuity payments on the death of the member.