Content overview: “Bereaved Families Avoid Tax Penalties on Delayed Pensions Under New Rules”. Families who have lost a loved one will no longer face unexpected tax bills caused by delays in pension payments, under new government rules announced this week. The change addresses a problem highlighted by campaigners, who warned that some bereaved relatives were being unfairly penalized for admin The change addresses a problem highlighted by campaigners, who warned that some bereaved relatives were being unfairly penalized for administrative hold-ups beyond their control.
Previously, if a pension provider took too long to process a claim after a death, the delayed lump sum could push the family into a higher tax bracket for that year, leaving them with a hefty bill. The new rules ensure that any pension arrears paid late due to provider delays will be taxed as if they had been paid on time, preventing an artificial spike in income. The full version stays on the original page, which this listing opens directly.