Taxation of a pension lump sum in Probate

[CuriousCork]

A mother of a friend has just received €18,000 of a lump sum pension payment directly from her husband's pension company following his death. The €18,000 is the entire value of the pension fund. She needs to know the following:

1) Should the €18,000 go into her husband's probate account or can she keep it directly?
2) Is it taxable? If so, who pays the tax, her or the executor of the probate if the money goes into the probate account.

 

[jpd]

The lump sum will be probably be paid directly paid to the estate - but it is worth checking with the pension trustees

Yes, it is part of the estate and so taxable - but all inheritences from a husband are tax-free to the remaining spouse

All inheritence taxes are payable by the recipient but generally the executor makes the payment to the Revenue and pays the net amount over to the recipient

 

[Oisin19]

the person was probably the beneficiary on the pension so were paid out the lump sum by the trustees. This payment is tax free up to 4X of the members salary. I don't think probable is required as its up to the trustees to pay out the funds

 

[Dave Vanian]

Type of pension the husband had is very relevant here as there are different taxation rules depending on the type.

Occupational Pension Scheme? Probably not as she received the money directly from the pension company and not the trustees.

Buy Out Bond a.k.a. Personal Retirement Bond?

Personal Pension or / PRSA? Maybe. In which case the fund is tax-free in the widow's hands.

Approved Retirement Fund (ARF)? Doesn't sound like it from the post but not impossible.