Inheritance Tax on pensions: liability, reporting and payment
Read the full outcome
Detail of outcome
At Autumn Budget 2024, the government published a technical consultation on bringing unused pension funds and death benefits into scope of Inheritance Tax from 6 April 2027.聽聽
The government has now published a summary of responses and a full response to this technical consultation. This confirms that, in line with the current treatment of pensions already in scope of Inheritance Tax, personal representatives will be liable to report and pay Inheritance Tax on pensions from 6 April 2027.
It also confirms that all death in service benefits payable from a registered pension scheme will be excluded from the value of an individual바카라 사이트檚 estate for IHT purposes. This supports the government바카라 사이트檚 objective to build a fairer tax system by removing distortions which have led to pension schemes being increasingly used and marketed as a tax planning vehicle to transfer wealth, rather than for funding retirement. It also removes inconsistencies in the Inheritance Tax treatment of different types of pensions.
Original consultation
Consultation description
As announced at Autumn Budget 2024, from 6 April 2027 most unused pension funds and death benefits will be included within the value of a person바카라 사이트檚 estate for Inheritance Tax purposes and pension scheme administrators will become liable for reporting and paying any Inheritance Tax due on pensions to HMRC.
This is a technical consultation on the processes required to implement these changes for UK-registered pension schemes.聽It is likely to be of interest to individuals, pension scheme administrators and other pensions professionals, tax and legal practitioners.聽
After the consultation, the government will publish a response document and carry out a technical consultation on draft legislation for these changes in 2025.
Documents
Updates to this page
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A summary of responses to the consultation has been published.
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First published.