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When someone inherits a DC pension?

genou
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Re: When someone inherits a DC pension?

#412091

Postby genou » May 15th, 2021, 11:27 am

ReallyVeryFoolish wrote:What isn't clear to me though - Does the "tax clock" reset on inheritance? So the surviving spouse gets to exercise the 25% tax free lump sum and has the freedom that a modern drawdown SIPP offers? I think it does. But I can't really find anywhere that says this is the case.
RVF


There's no PCLS for a successor. There is the possibility of getting an untaxed lump sum if the deceased was under 75. There's a reasonable walk through here - https://www.pruadviser.co.uk/knowledge- ... ributions/

DrBunsenHoneydew
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Re: When someone inherits a DC pension?

#412682

Postby DrBunsenHoneydew » May 17th, 2021, 11:29 am

You should be able to take any amount of the inherited pension from a person who died under-75 tax-free, either as complete or partial lump-sums or as a regular monthly income.
With an over-75 demise, anything you inherit will be taxed at your marginal rate - no part is tax-free.
As you point out, the charges may swing your choices.


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