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Update on Pension Inheritance Tax

Our article from May 2026 covered the Government’s first technical note on the new inheritance tax and pension regime which will come in from April 2027. That article highlighted the importance of executors identifying pension details as early in the pre-probate process as possible. This is because inheritance tax on pensions, as well as other assets, has to be paid within six months of death if penalty payments are to be avoided.

Now a further technical note has been issued, which identifies five stages in which personal representatives and pension schemes will need to interact. These are:

•  notification of death and basic information
• further information requested
• withholding notice
• payment notice
• payment of tax-free lump sum death benefits

The technical note stresses that not all stages may be required, particularly in circumstances where no inheritance tax is payable. It sets out the definition of personal representatives and also includes some examples covering the most common inheritance tax and payment scenarios.

If you are looking for advice on pensions or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.