Chailey Heritage School

Did you know tax on pension funds on death can be avoided by means of a charitable donation? 

Following a change in legislation recently, money purchase pension funds in the form of personal pension plans, self invested personal pension plans (SIPPs) or small occupational pension schemes, notably self administered schemes, are required to pay a significant tax on the death of the member after age 75 if there is no spouse or qualifying dependent available to receive the pension fund.      

There is no mechanism available to avoid this tax unless the entire pension fund is left to charity in which case no tax will apply. If  you nominate a charity immediately upon reaching age 75, you can avoid a total potential tax charge against your fund of 82%. Funds passed to a registered charity on death of the member will avoid this tax charge in full.