The following is intended as a high level introduction to what happens to your SIPP when you pass away but it is a complex area and please do check regularly as tax rules are subject to change. If you remain unsure how this could impact you or your beneficiaries, we recommend that you talk to a regulated financial adviser. If you do not have a financial adviser, you can find a regulated adviser close to you at

What happens to my SIPP when I die?

When you die, the remaining value of your pension (SIPP) can be passed on to your beneficiaries. If you are yet to do so, you should take the opportunity to notify us of who you would like this to be. You can do that by completing our Expression of wish form. Whilst we as trustee ultimately have discretion as to who any death benefits are paid, your wishes as detailed in an Expression of wish form will be taken into account. The death benefits can either be paid to your nominated beneficiaries as a lump sum or used as an ongoing pension to provide an income and benefit from leaving the money invested in a tax efficient wrapper.

What is the tax treatment of my SIPP when I die?

One of the advantages of a Self-invested personal pension (SIPP) is the tax advantages on your death. Death benefits are normally paid without incurring inheritance tax and if you die before age 75, there is generally no income tax liability, subject to the 2 year time limit. If you die after the age of 75, the death benefits will be subject to income tax at the recipient’s marginal rate.

Who can I choose to receive the death benefits?

You can choose to nominate an individual, charity or trust. You can divide the death benefits by stating a percentage amount to be given to one or more individuals, charities or trusts.

Will the death benefits definitely be paid to my nominated beneficiaries?

The distribution of the death benefits is normally done in accordance with your wishes as provided to us when you were alive, but this is at the discretion of the trustee (James Hay). We will request additional information at the time of your death  to be used in conjunction with the information you provided on your Expression of WishIn exceptional circumstances or as a consequence of a legal challenge, the trustee may decide to pay to someone else.

What happens when my beneficiary dies?

In simple terms, exactly the same as when the original plan holder dies. The remaining value can be passed on to unlimited beneficiaries and generations until the value is fully eroded or taken by a beneficiary as a lump sum. The income tax liability will again depend on the age of the beneficiary when they pass away.