Issue

Flexi-access drawdown

By-pass trust

Tax on death benefits

Death under age 75:

No tax.

No tax.

Death aged 75 or over:

Taxed on beneficiary when income drawn.

Lump sum paid from pension plan to by-pass trust taxed at 45%. (1), (2)

Control over who benefits in the future

Member names nominee. If flexi-access drawdown (FAD) designated to that nominee he/she can draw whole fund. Similar position on the naming of a successor by nominee.

Trustees of by-pass trust decide who benefits, how much they benefit from and when they benefit – frequently guided by expression of wish from member.

Controlling payments to specific beneficiaries

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