Personal representatives will be liable for reporting and paying any IHT on unused pension funds from April 2027.
Published on July 21, the government put out its draft legislation to apply IHT on unused pensions funds and death benefits. Although the proposals remain largely unchanged from when Rachel Reeves announced them in the Autumn 2024 Budget, the government has made a few revisions to what it had previously announced.
Between October 2024 and January 2025, the government consulted on the process for reporting and paying IHT on unused pension funds and death benefits.
It proposed that pension scheme administrators would be liable for reporting and paying any IHT on the pension element of an individual’s estate.
Following the consultation, the government has announced personal representatives rather than pension scheme administrators, will be liable for reporting and paying any IHT due on unused pension funds and death benefits from April 6, 2027.
It also confirmed death in service benefits payable from a registered pension scheme will remain out of scope of IHT.
Steve P
