Beneficiaries of employer-provided pension benefits

When an employer provides death-in-service benefits through a life assurance policy or offers retirement benefits through a qualifying relevant overseas pension scheme, the employee in question will usually name a beneficiary to receive any payment due on their death or to receive their retirement benefits.
Up to 5 April 2019, premiums paid into these schemes by the employer only represented a tax-free benefit for the employee if the named beneficiary was another employee or a member of the deceased employee’s family or household (e.g. spouse, civil partner, parents, children, dependants, domestic staff and guests). For 2019/20 onwards, the exemption is extended to include any named individual as the preferred recipient, irrespective of their relationship to the employee. The extended exemption will also allow employees to nominate a registered charity.

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