Income Tax (Earnings and Pensions) Act 2003 section 637R

Individual's lump sum and death benefit allowance

Section 637R establishes the standard lump sum and death benefit allowance, which sets the maximum amount of tax-free pension lump sums and death benefits an individual can receive.

• Every individual has a lump sum and death benefit allowance of £1,073,100
• This allowance caps the total tax-free pension lump sums and death benefits payable
• The allowance was introduced by Finance Act 2024 as part of the reformed pension tax framework
• Amounts exceeding this allowance will be subject to income tax