Overview
- HMRC confirmed that personal representatives can instruct pension schemes to hold back up to 50% of benefits when they believe inheritance tax may be due.
- Payments to exempt recipients such as spouses are excluded from holds, and providers should release up to half of benefits promptly during any withholding period.
- From April 2027, unused pension savings will count toward inheritance tax as ‘notional pension property’ and be taxed at the standard 40% rate above existing thresholds.
- Inheritance tax is generally due within six months of the end of the month of death, yet schemes may keep funds on hold for up to 15 months while values and liabilities are confirmed.
- Advisers warn of heavy admin as executors locate multiple pension pots and value complex assets like SIPP property, with Treasury estimates pointing to 10,500 more estates paying IHT and average bills rising by about £34,000.