When you die, your SIPP benefits will be paid to your beneficiaries. This can be as a lump sum or as an ongoing pension. You need to complete a nomination form to say who you wish payments to go to, and they are paid at the discretion of AJ Bell Management Limited, which is the Scheme Administrator of your SIPP.
Lump sums paid on death are usually paid without any inheritance tax being due, although this cannot be guaranteed. At present any lump sum death benefit paid from an income drawdown fund to beneficiaries is subject to a 55% tax charge, but this is to change from 6 April 2015. Please visit our pensions freedom area for more information.
Your ISA will lose its tax advantaged status when you die and we will convert it into a dealing account. The assets in your former ISA or in any dealing account will form part of your estate and we will distribute them according to the instructions of your executor once probate is granted.
From the 3 December 2014 where an ISA holder dies, their surviving spouse or civil partner will now be able to inherit their ISA tax benefits. This will be in the form of an additional allowance equal to the value of the ISA at the holders death and will be in addition to the survivors own ISA allowance.
Please remember that tax rules can change in the future and the tax treatment depends on your personal circumstance.