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bigduckontax, Accountant
Category: Tax
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My wife passed away recently and had work related personal

Customer Question

my wife passed away recently and had work related personal pension policy with Scottish Widows who have paid a lump sum into my bank account could you advise me about the tax implecations
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.

On death all a deceased's assets are aggregated and subjected to Inheritance Tax (IHT). IHT kicks in at 325K and is at 40% flat rate on the surplus. If over 10% of the estate is bequeahted for charitable purposes then the rate falls to 36%. The 325K is inflated by any charitable and inter spousal bequests also.

Inter spousal bequests are thus outside the scope of IHT. A anything received from your late wife esapes any UK taxation irrespective of the amount so the lump sum is yours tax free anyway.

I do hope that I have been able to set your mind at rest on this matter.