Inheritance tax on pensions from 2027
Last reviewed 18 August 2026
For decades an unused pension could pass to the next generation outside the reach of inheritance tax. From April 2027 that changes, and the shift is among the most consequential in recent estate law.
What changes, and when
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. The change was enacted by the Finance Act 2026, which received Royal Assent on 18 March 2026, and applies to deaths on or after 6 April 2027 — if the member dies before that date, the current rules apply even where benefits are paid afterwards.
Who pays, and what stays exempt
Personal representatives — executors or administrators — will be responsible for reporting and paying any tax due on the pension element, not the pension scheme. Death-in-service benefits paid from a registered scheme are excluded, and transfers to a spouse, civil partner or charity remain exempt.
Questions
When does the pension change take effect?+
Who reports and pays the tax?+
Are death-in-service benefits affected?+
Sources. GOV.UK, Technical note: Inheritance Tax on pensions (29 May 2026); Finance Act 2026 (Royal Assent 18 March 2026).