Inheritance Tax on pensions: technical note

This technical note provides further detail on reforms to the Inheritance Tax treatment of pensions legislated for in Finance Act 2026. From 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of a deceased person’s estate for Inheritance Tax purposes.

The note explains how the legislation will operate in practice for personal representatives, pension scheme administrators and beneficiaries, and outlines the proposed approach to information‑sharing and tax collection.

It sets out:

• how notional pension property is identified, valued and allocated to beneficiaries
• who is responsible for reporting and paying any Inheritance Tax due
• the use of withholding notices and the pensions direct payment scheme
• how the reforms interact with existing Income Tax rules on pension death benefits

HMRC will continue to publish secondary legislation, guidance and supporting materials ahead of implementation in April 2027.