Are "death in service" benefits taxable?

[razbox]

Hi guys,

My friend recently passed away and his mum is a named beneficiary on his death in service payment.

• Does the death in service benefit fall within his estate, and subject to IHT?

• Is there CGT payable by his mum on receipt of the funds?

• The company is giving her a choice of allocating it to the estate or paying it directly to her - is there any impact of either?

thanks

[The Leaper]

razbox

I assume that friend's mum is actually a "nominated beneficiary" according to the scheme's rules, and the scheme trustees have decided already to pay a benefit to her.

• highly unlikely:99% of schemes will have a discretionary trust (I could explain if you wish) which means that there will be no IHT liability

• no

• pay direct, otherwise there's the possibility of IHT which will be assessed against the total estate value.

R

[razbox]

Thank you Mr Leaper, very helpful.