Call for evidence on pensions IHT legislation

The House of Lords Finance Bill Sub-Committee has launched a call for evidence as part of its inquiry on the draft Finance Bill 2025–26, exploring the sections on the proposed reform of inheritance tax (IHT) to include unused pension funds and death benefits. The call for evidence runs until October 7, 2025.

The inquiry seeks input on the practical application of the changes, and includes questions such as:  

• How challenging will it be for personal representatives to identify and report IHT due on unused pension funds and death benefits? This includes whether there will be significant liquidity challenges in paying IHT.
• Has the Government sufficiently considered the impact of the measure on personal representatives and pension schemes administrators and how aware are affected parties of the proposals?
• Can the Government do more to raise awareness ahead of April 2027?

The call for evidence follows the draft legislation published by HMRC in July, the technical consultation on which closed on September 15, 2025. The Finance Bill Sub-Committee's work does not look at the rates of tax proposed by the Government. Instead, it makes recommendations on how the Government’s tax policy can best be implemented and administered.