- At Autumn Budget 2024, the government announced that it aims to bring the value of most unused pensions savings and death benefits within the scope of an individual’s estate for inheritance tax (IHT) purposes. On 21 July 2025, HMRC published a summary of responses and a full response to this technical consultation. It confirmed that personal representatives will be liable to report and pay Inheritance Tax on pensions from 6 April 2027 and that most death in service benefits payable from a registered pension scheme will be excluded from the value of an individual’s estate for IHT purposes.
- Timing: Unused pensions and certain death benefits will be subject to inheritance tax from 6 April 2027. The primary legislation bringing these changes into effect was in Finance Act 2026. Secondary legislation is partially enacted.
Resources (click to open)
- Technical note 2: Further information on Inheritance Tax and Pensions - GOV.UK (HMRC policy paper, 27 August 2026)
- Technical note: Inheritance Tax on pensions - GOV.UK (HMRC policy paper, 29 May 2026)
- Inheritance Tax — unused pension funds and death benefits (HMRC, policy paper and draft legislation, 26 November 2025)
- Reforming Inheritance Tax — unused pension funds and death benefits - GOV.UK (HMRC, policy paper and draft legislation, 21 July 2025)
- Inheritance Tax measures (Deloitte, 30 October 2024)
- Consultation: Inheritance Tax on pensions: liability, reporting and payment (HMRC, consultation closed 22 January 2025)
- Overview of pension reforms from 6 April 2024 | TaxScape | Deloitte (March 2024)
- Pensions: Lifetime Allowance Protections | TaxScape | Deloitte (March 2024)
- Abolition of the lifetime allowance (LTA) (HMRC, policy paper, November 2023)
