On July 21, 2025, HMRC published the Government’s response on IHT on unused pension funds.

HMRC has also published a policy paper and draft Finance Bill measures, which will bring most unused pension funds and death benefits into scope of inheritance tax (IHT) from April 6, 2027. From this date, personal representatives (not pension scheme administrators, as had originally been proposed) will be liable to report and pay any IHT due on unused pension funds or death benefits. 

However, all death-in-service benefits payable from a registered pension scheme or a dependant’s scheme pension from a DB arrangement will be excluded from the value of an individual’s estate for IHT purposes from April 6, 2027.



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