Overview
- HMRC published a technical note that sets out how 'notional pension property' will be identified, valued, reported and collected, giving detailed operational steps for providers and personal representatives.
- Personal representatives will be required to take reasonable steps to trace and value a deceased person’s private and workplace pensions and to report them to HMRC for IHT assessment.
- The rules, which apply to deaths on or after 6 April 2027, include a withholding arrangement that lets providers retain up to 50% of lump sums for up to 15 months and a pensions direct payment route to settle tax with HMRC.
- Government projections show roughly 10,500 estates will become newly liable for IHT and a further 38,500 already liable estates will face higher bills averaging about £34,000 in the first year.
- Spouses, civil partners and some dependants’ or genuine death‑in‑service payments remain exempt while business and agricultural property reliefs will not apply to pensions, and experts urge savers to check nominations, keep records and review estate plans now to avoid delays and bigger bills for bereaved families.