Will Lump Sum Payment to a Deceased Family be Tax Deductible?

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    One of my employees has died suddenly and I want to make a lump-sum payment to his family. Will this be tax deductible for my company and will the family be taxed on the payment?

     

    Any lump sum payment made in connection with the death of a serving employee is tax free for the recipient, as long as that payment does not constitute an un-approved retirement benefits scheme. The payment should also be tax deductible for your company as it is made in connection with the termination of the employment of one of your staff, (unfortunately in this case by death).

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