Pension trustees get new rules for inheritance tax reporting
Updated guidance kicks in this week as pensions join the inheritance tax picture from April 2027.
If you're managing a pension, or you stand to inherit one, there's an important change coming this week. The Pensions Regulator has published updated guidance on a crucial change to how pension death benefits will be reported when inheritance tax rules shift in April 2027.
Here's why it matters. Until now, if someone died with unused pension savings, those pots were safe from inheritance tax. From April 6, 2027, that changes: most unused pension funds and certain death benefits will now count as part of your estate for inheritance tax purposes. That could trigger a 40% tax bill for beneficiaries.
The Pensions Regulator's updated Code of Practice comes into force on 31 July 2026, setting out new information sharing rules between pension trustees and personal representatives of deceased members. Families will know exactly what they're dealing with, and what they owe.
For many families, this is a powerful reason to rethink protection. Life insurance held in trust can provide a tax-free lump sum to help cover the inheritance tax bill on a pension without forcing relatives to sell assets or delay things. It's worth reviewing your setup if you have a pension and people depending on you.
Based on reporting from the UK government and the Pensions Regulator (July 2026). Information only, not advice.
Information only. This is general information, not financial, tax or legal advice, and not a personal recommendation. Tax rules depend on your individual circumstances and can change. Please speak to a qualified, FCA-regulated adviser or a solicitor before acting.