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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17610
Experience:  International tax
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I will benefit from a "unapproved pension" lump sum which is

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I will benefit from a "unapproved pension" lump sum which is subject to PAYE this is following the death of my husband and in respect of. My thinking is, that as I am working full time this may therefore attract 40% taxation. So, wondering if I could spread the benefit to say 10K each to my two children as they would then only pay 20% as their income would still be below the 31K.
Hello and thank you for allowing me to assist you.
It is true that under an unapproved pension, there can be a substitution of beneficiary by the original person but I have not found anywhere that the substitution could be made after the original is deceased.
Section 392 allowed a taxpayer to apply for relief in circumstances where he can show that some event has subsequently occurred by reason of which no relevant benefits will become payable and that no payment has been received by him in respect of or in substitution for those benefits. but that section only speaks to the original person and not subsequent beneficiaries.
Based on that I have to say no, you cannot spread the benefit to another (even children).
Even application of relief under s.392 is in HMRC's discretion. They could deny the original person from naming a substitute.
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Customer: replied 2 years ago.


Thank you for your reply. I understand the way defined. Could you confirm whether this is an open email and likely to be posted to your site?

I know there is something legally with regard to estates that you can within a period of something like two years transfer inheritance, but that may just relate to property. Thus as I am administering and benefiting I thought I may apply the principle. But this is on the basis of a little knowledge being a dangerous thing??? So, whereby I am being asked to sign a sole beneficiary I could change to include my children who are both over 18. The main purpose of the document is to make sure I do not come back to claim any sort of part ownership.

I will take this information forward it is very useful, thank you.

This is a slightly different case, I guess.

Many thanks


You are most welcome and I sincerely ***** ***** situation is concluded to your benefit.
I do not think the pension can be re assigned at this point.