What is the tax treatment on annuity benefits that are passed to my beneficiaries?

With all the changes to pensions legislation with the 2015 Budget I wanted to know whether anything has changed with regards to passing on your annuity to a beneficiary should you pass away?

Question asked by Thomas Gardner
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Answered by Neil Adams

Following the 2015 Budget announcement, assuming you die before age 75, pension income paid to your spouse or partner via a lifetime annuity with joint-life, value protection or a guaranteed period is now free of income tax.

Note: Death benefits paid from a scheme pension as value protection, a joint-life annuity or as a continuing guarantee period are not tax free. Be sure to check with your scheme provider to find out how this might apply to your annuity benefits.

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