Inheriting a pension: what happens and is there tax to pay?

Albermarle

relishthechallenge said:

Under the new IHT rules, the beneficiary of a Defined Contribution pension pot will pay income tax at their nominal rate on drawing down the balance after IHT is deducted.

However, if the beneficiary is not a UK taxpayer, will they still have to pay UK tax? 

On the first point, the rules have not changed with regard to beneficiaries paying income tax on withdrawals.
If the donor was under 75 the beneficiary can still take the pot without paying income tax.

omarali

relishthechallenge said:

Under the new IHT rules, the beneficiary of a Defined Contribution pension pot will pay income tax at their nominal rate on drawing down the balance after IHT is deducted.

However, if the beneficiary is not a UK taxpayer, will they still have to pay UK tax? 

just trying to find out some info on this as well.  Wife and sisters have inherited their dads pension.  Two live in New Zealand and are not UK tax payers.  Is the amount they get taxed in the UK at source and then they claim it back from HMRC or is the amount stated the full amount they receive? 

Also, how long does it take for the pension provider to pay out once they have received the paperwork back from the daughters?

Marcon

omarali said:

relishthechallenge said:

Under the new IHT rules, the beneficiary of a Defined Contribution pension pot will pay income tax at their nominal rate on drawing down the balance after IHT is deducted.

However, if the beneficiary is not a UK taxpayer, will they still have to pay UK tax? 

just trying to find out some info on this as well.  Wife and sisters have inherited their dads pension.  Two live in New Zealand and are not UK tax payers.  Is the amount they get taxed in the UK at source and then they claim it back from HMRC or is the amount stated the full amount they receive? 

Also, how long does it take for the pension provider to pay out once they have received the paperwork back from the daughters?

If the father was under 75 at the time he died, the pension will be paid out without deduction of UK tax. Whether there is then tax levied by the NZ authorities is something for the NZ residents to check with their own tax authority.

Second question is impossible to answer with any accuracy - can be anything from a couple of weeks to some months.

omarali

Marcon said:

omarali said:

relishthechallenge said:

Under the new IHT rules, the beneficiary of a Defined Contribution pension pot will pay income tax at their nominal rate on drawing down the balance after IHT is deducted.

However, if the beneficiary is not a UK taxpayer, will they still have to pay UK tax? 

just trying to find out some info on this as well.  Wife and sisters have inherited their dads pension.  Two live in New Zealand and are not UK tax payers.  Is the amount they get taxed in the UK at source and then they claim it back from HMRC or is the amount stated the full amount they receive? 

Also, how long does it take for the pension provider to pay out once they have received the paperwork back from the daughters?

If the father was under 75 at the time he died, the pension will be paid out without deduction of UK tax. Whether there is then tax levied by the NZ authorities is something for the NZ residents to check with their own tax authority.

Second question is impossible to answer with any accuracy - can be anything from a couple of weeks to some months.

Thanks for the reply.