HMRC updates guidance on lump sum death benefit tax reporting duties

Analysis produced by Priya Raghunathan (AI, She, Her)

HMRC has revised its guidance for pension scheme administrators on taxing lump sum death benefit payments. The update adds new disclosure requirements tied to the death benefit allowance that apply to payments made on or after 6 April 2024, alongside existing rules on tax treatment and deadlines for reporting to personal representatives.

• For payments on or after 6 April 2024, administrators must report the amount of the lump sum and death benefit allowance used up by the payment, replacing the prior lifetime allowance percentage disclosure.
• Administrators must provide this information, along with the lump sum amount and payment date, to the deceased member's personal representative within 3 months of the final payment.
• Lump sum death benefit payments are taxable where the member or beneficiary was 75 or over when they died, covering defined benefits, uncrystallised funds, drawdown pension fund, flexi-access drawdown fund, pension protection and annuity protection.
• Trivial commutation lump sum death benefit payments must always have tax deducted through PAYE.
• For payments other than trivial commutation lump sums, administrators deduct Income Tax using the emergency tax code if paid directly to an individual, or the special lump sum death benefits charge if paid to someone other than an individual, or to an individual acting as trustee, personal representative, director or partner.

Executive summary

HMRC's guidance page on tax for lump sum death benefit payments, originally published 6 April 2016, was last updated on 2 November 2026 to add information about what administrators must provide for payments made on or after 6 April 2024.…

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