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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