Paye Scheme for a pension

Trusts Discussion
1

I would appreciate any guidance that members are able to offer.

The deceased had a company pension that we are trying to bring to a close and for it to pass to his three children . Two are straightforward in that we will transfer the share of the investment to a their own pensions. The other is going to a child who lives in the US.
I will be asking for one payment - we have jumped through all the hoops with the US tax department but Aviiva are asking me to ensure that I have set up a scheme PAYE up in readiness for this.

I cannot work out if this is something that is done with HMRC or something with the pension itself …one final step

Thanks

Collette

2

So there are some facts that I am guessing here but I assume that the member died after their 75th birthday so that under UK domestic law income tax is due on the cash paid to the US child. If that is right then the pension scheme should register as an employer with HMRC and the pension scheme would then operate PAYE in the normal way on the money paid to the US child. As this seems likely to be a one-off payment, it would be worth calling the HMRC helpline after registration to make sure that the pension scheme is an “occasional employer” (saves having to do monthly RTI for the months when no payments are made).

The pension scheme would need some PAYE software to do this (outsource it, use HMRC’s free software, etc).

There’s then a separate question for the US child as to how it is taxed under US domestic law and how the UK-US DTA changes things. That’s not for the pension scheme though. It just has to operate PAYE on the payment. One difference for the US child compared with a normal pension paid from a UK pension to a US member is that the payment may, depending on the actual facts, only be taxed in the UK under the DTA.

3

If the pension scheme is administered by Aviva I am surprised they are asking you whether you have a PAYE scheme since they already have myriad schemes to operate PAYE on the many pensions they pay and must set these up frequently. When paying pension lump sums to a non-UK resident they automatically operate “emergency” tax which the individual may be able to claim back.
Maxine
TC Citroen Wells

4

I wonder if this is a SSAS (Small Self Administered Scheme)?

5

@Garlands unlikely if AVIVA are the admin. Without knowing the circumstances of the scheme and the position of the deceased it’s not easy to assist.

6

You may well be right, but ‘admin’ was suggested in the replies, not the question. I had in mind that Aviva might be providing an investment vehicle - eg https://static.aviva.io/content/dam/document-library/adviser/adviserplatform/lf40064c.pdf

Collette, please could you confirm the type of scheme this is and what exactly Aviva’s role is?

7

Hello

Yes it is SSAS

Thank you for all of the assistance so far

Collette

8

Thank you. In that case the answer above from Tigs is the way forward!

The trustee(s) of the SSAS can download HMRC’s free payroll software from Download HMRC's Basic PAYE Tools - GOV.UK