Losing a loved one can be completely divesting and there are several issues that need to be taken care of. From an emotional as well as practical standpoint, this is a huge loss that requires immediate attention from the deceased’s family members. In this piece, we mention some crucial information that can help you with the deceased’s pension affairs and some further guidance on handling the tax affairs after their death.
When should I inform the financial institutions about the death?
It generally makes sense to do it as soon as possible; however, there is no set prescribed time limit. Life Assurance companies as well as Pension Providers must be informed as soon as possible to enable them to pay out the amount due to the family members at the earliest. Similarly, in case the deceased was receiving regular income, it needs to be reviewed and evaluated to prevent money from being repaid.
What is the best way to contact organizations?
In the present circumstances, it is best to contact organizations online since most employees are likely to be working from home. You can also telephone but keep in mind that all organizations are likely to have fewer staff available to take calls. With that said, make sure to note down the name of the person you spoke with to keep notes of the call or future reference.
How can I find out if the deceased had any pension policies and/or life assurance?
This should be relatively straightforward provided you are either the next of kin or the executor of the state. However, pension providers and insurance companies need to be very cautious while making payments to ensure that they pay the amount to the right people.
For this, they will usually need to verify your identity, see the deceased’s death certificate and understand your relationship with them.
Typically, pension schemes and life assurance companies write to their members at least once a year providing details of the policies.
Alternatively, you can even find regular payments on the deceased’s bank statements or pay slips that will help identify those companies.
You can ask the employer if there is a company pension scheme or any death benefits that might become payable if the deceased was employed at the time of death.
Similarly, it may be worthwhile contacting any previous employers to see if they can help.
Once you have all the required information, it becomes much easier to contact the relevant insurance company or the pension payer.
How can I get the deceased’s pension and life assurance monies paid to me?
Often the trustees of the particular scheme have discretion as to whom the available funds can be paid out to where a lump sum amount needs to be paid. However, in case the deceased had expressed any preference, it is likely to take those wishes into account first.
Usually, funds are paid out to spouses, children or other family members of the deceased. While you can certainly put your case to the trustees, they will generally do what they think is best.
If a pension was being paid to the deceased, it might be possible to pay the pension (often at a reduced level) to a surviving family member – on which the pension company can advise further.
How do I inform HMRC and the DWP about the death?
You can inform them in two ways:
- Tell Us Once service is the simplest way offered by many registrars that lets you report a death to most government organizations in one go.
- Alternatively, you can contact them separately using this link
Why is it so important to inform HMRC and DWP about the death?
It is crucial to inform these organizations so they can finalize some important matters.
For instance, HMRC can update the deceased’s tax affairs, enabling personal representatives to pay out the state. They can also stop any tax credit claims meaning there will be less danger of overpayments being made.
Similarly, HMRC needs to be informed if you or someone else will start to receive taxable income as a result of their death from pension policies.
This will also ensure that HMRC has the information it needs to issue the correct tax codes to collect the correct amount of taxes.
Also, DWP may pay many state benefits, including the state pension which might need to be discontinued after the death.
Where can I get personalized help and advice on dealing with the deceased’s tax affairs?
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We are your local Chartered Accountants and Tax Advisers based in Putney, Harley Street and Battersea. We are expert XERO Accounting advisors and trusted business advisors in Wandsworth Borough.
While we are based in South West London and Central London, our clientele is quite global and our staff is currently working remotely to serve our clients through active Zoom accounts all over UK.
As always, you can reach out to us anytime to discuss any financial issues you may have in this coronavirus pandemic.
