14/10/2026
Many people are now asking: are pensions subject to inheritance tax?
At present, many pension pots sit outside estates for IHT purposes. However, under the new pension inheritance tax rules, most unused pension funds and pension death benefits will be included in the estate for deaths on or after 6 April 2027.
Three steps to consider before April 2027
Although the reforms will not take effect until 6 April 2027, individuals with significant pension savings may wish to begin reviewing their arrangements now. In particular, three areas are worth considering.
> Review your pension nomination forms: Ensuring that nominations are up to date can help pension trustees understand who you intend to benefit and how benefits should be distributed.
> Consider how pensions fit within your overall estate: For many people, pensions represent one of their largest assets. If these funds are brought within the scope of inheritance tax, it may be sensible to review how pension savings sit alongside other assets such as property, investments and business interests.
> Seek coordinated legal and financial advice: Decisions about drawing pension income, restructuring investments or making lifetime gifts can have complex tax consequences. Taking advice from both legal and financial advisers can help ensure that any changes support your long-term succession and tax planning objectives.
Our private client team regularly advises individuals and families on inheritance tax, estate planning and the interaction between pensions and succession planning.
