Policy paper

Technical note 2: Further information on Inheritance Tax and Pensions

Published 27 August 2026

1 Introduction — forward look

This technical note is not draft guidance.

The government expects to lay further consequential statutory instruments ahead of 6 April 2027:

1. To make consequential amendments to the Registered Pension Schemes (Splitting of Schemes) Regulations 2006. This will ensure that the new information requirements apply to sub-scheme administrators.
2. To amend the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004, to ensure that estates which include notional pension property can qualify as excepted estates.

HMRC will continue to work closely with stakeholders throughout the autumn, which may include further workshops. The following is an outline of future plans:

• summer — autumn 2026: continue process design and develop guidance and other support tools
• autumn 2026: technical note 3 which is expected to cover international issues, the interaction of Inheritance Tax with income tax, further guidance on intestacy, and clarification of matters relating to charities and trusts, among other topics
• autumn — winter 2026 — 2027: share draft guidance with industry stakeholders
• autumn — winter 2026 — 2027: additional regulations to be published on split schemes and excepted estates
• winter — spring 2026 — 2027: communications activity to publicise upcoming changes to impacted groups
• spring 2027: publish guidance and other supporting materials

2 Information sharing requirements — overview

2.1 The Registered Pension Schemes (Provision of Information) (Miscellaneous Amendments) Regulations 2026

The Registered Pension Schemes (Provision of Information) (Miscellaneous Amendments) Regulations 2026 (SI 2026/818) were laid on 15 July 2026. They amend The Registered Pension Schemes (Provision of Information) Regulations 2006 (SI 2006/567) and set out the information that pension scheme administrators, insurance companies and personal representatives must supply to each other, to beneficiaries of pension schemes, or to HMRC after the death of a member. All references to regulations throughout this note are to The Registered Pension Schemes (Provision of Information) Regulations 2006 unless otherwise indicated.

These regulations ensure personal representatives can collect the necessary information about the deceased’s estate and submit a complete Inheritance Tax account to HMRC. They ensure pension scheme administrators will provide the information necessary for that account and keep pension beneficiaries informed during the process. They also help HMRC to check the correct pension benefits have been included in that account, and the correct tax is charged in connection with the deceased and the pension beneficiaries.

This note puts the information requirements into context throughout the customer journey and provides further clarity on the process, building on technical note 1. There have been some amendments to the final regulations following responses to the consultation on the draft regulations. In particular, pension scheme administrators will only have to inform personal representatives about any excluded benefits and provide details of these only where an Inheritance Tax account is required.

There are five stages at which personal representatives and pension scheme administrators will need to share information. These are:

• notification of death and basic information — the latter should be requested by the personal representative and includes the value of the notional pension property
• further information — requested by the personal representative when they are required to file an Inheritance Tax account, and includes the share of the notional pension property attributable to each beneficiary
• withholding notice — information for the personal representative and beneficiaries if the personal representative instructs the pension scheme administrator to withhold up to 50% of the notional pension property (and in cases where there is a pension transfer)
• payment notice — information for the personal representatives and beneficiaries if either instructs the pension scheme administrator to pay some or all of the Inheritance Tax attributable to the notional pension property
• payment of tax-free lump sum death benefits — information for the personal representative to determine if the deceased’s lump sum and death benefit allowance has been exceeded

These stages are listed in the order in which they are most likely to occur. However:

• not all of these stages will necessarily occur. For example, further information is only required if an Inheritance Tax account needs to be filed, which will not be the case for all deaths
• stages may occur concurrently. For example, a personal representative may request basic information and further information and instruct a pension scheme administrator to withhold benefits, all at the same time

Where deadlines are expressed in days, these are calendar days.

Definition of personal representative

The term ‘personal representative’ in The Registered Pension Schemes (Provision of Information) Regulations 2006 is defined by reference to two statutory references. This is necessary because the regulations cover multiple tax areas.

Please note references to ‘executor’ in this note mean an executor named in a valid Will (and not an ‘executor-dative’ in Scotland).

Income Tax

Regulations 10C to 10F relate to the provision of information for the administration of the estate and do not refer to specific notices under the Inheritance Tax Act 1984. Therefore, they rely on the general definition of ‘personal representative’ from section 989 of the Income Tax Act 2007. This definition enables both personal representatives and prospective personal representatives to request, and receive, the relevant information required from a pension scheme administrator or insurance company. The act of requesting information is one of administration and not acceptance of legal responsibility for Inheritance Tax.

Inheritance Tax

Regulations 10G to 10M concern withholding or payment notices issued under the Inheritance Tax Act 1984. For those purposes, the definition of ‘personal representative’ is the inclusive definition found in section 272 of the Inheritance Tax Act 1984.

Where named executors are dealing with the estate administration, or where they instruct a third party to deal with the estate on their behalf, their title vests in them at the date of the deceased’s death. Their rights and liabilities as executors apply before any application for a Grant of Representation is made, including their liability for any Inheritance Tax payable. On this basis, acting named executors meet the definition of ‘personal representative’. They can give both withholding and payment notices and receive relevant information relating to such notices from a pension scheme administrator, before applying for a Grant.

Prospective personal representatives

For cases where there is no named executor dealing with the estate administration (for example in an intestacy situation or in a case where there is a valid Will, but the executor is unable or unwilling to act) the individual acting has no title to the deceased’s estate until a Grant of Representation is made. The Inheritance Tax Act 1984 provides a separate definition of ‘prospective personal representative’ in section 226A(12) of the Inheritance Tax Act 1984. This enables those who intend to administer an estate, but do not meet the stricter definition of personal representative under section 272 of the Inheritance Tax Act 1984, to give withholding notices and receive information relating to both withholding and payment notices. This is in addition to being able to request information under regulations 10C to 10F, by meeting the wider definition of ‘personal representative’ under section 989 of the Income Tax Act 2007.

Sections 3.2 and 3.3 of this note provide more information about establishing the identity of personal representatives and prospective personal representatives.

Insurance companies

Insurance companies paying an annuity purchased using funds originating from a pension scheme are covered by the amended regulations. Personal representatives are likely to be aware of the need to contact an insurance company where the deceased was receiving an annuity or pension from that company.

Insurance companies, when paying an annuity as described above, are generally subject to the same obligations and reporting deadlines as pension scheme administrators, except where legislation makes different provision. In this note, references to pension scheme administrators should be read as including the relevant managers of the insurance companies. Any differences between the obligations on an insurance company and those applying to pension scheme administrators are highlighted where relevant.

Tax residency

For the purposes of this Technical Note, it is assumed in all examples that all parties are long-term UK tax residents. Future technical notes will cover situations where this is not the case.

3 Notification of the death

3.1 Introduction

Pension scheme administrators may become aware of a member’s death from a variety of sources. Most commonly, they will be contacted by a family member, the personal representative or their legal representatives. However, pension scheme administrators may also become aware of a member’s death through other avenues.

As soon as a pension scheme administrator becomes aware of a member’s death, they should begin any discretionary or non-discretionary processes required to identify beneficiaries and establish the value of the deceased member’s notional pension property (see section 5 (Initial assessment of Inheritance Tax liability) for further detail).

Pension scheme administrators may wish to contact personal representatives before they receive any formal requests and continue with any existing practices. This technical note focuses on obligations under the legislation.

Example 1 — death of member, notified by personal representative and evidence supplied

Asha died aged 72. She had a money purchase pension scheme. She had an annuity (provided by an insurance company) and £50K in a flexi-access drawdown account.

Asha is widowed and leaves one adult child, her daughter Grace. Grace is named as Asha’s beneficiary in the expression of wishes held by the scheme, and as executor in Asha’s will.

Following Asha’s death, Grace accepts the role of personal representative and contacts the pension scheme and the annuity provider to notify them of the death. They explain what evidence will be required to verify both the death and Grace’s identity as the personal representative.

Once notified of the death, the pension scheme administrator begins the discretionary process and establishes the value of Asha’s notional pension property.

Grace provides the requested evidence and requests the basic information from the pension scheme and annuity provider.

Having received the necessary evidence, the annuity provider confirms that because the annuity ceased on Asha’s death the value of the notional pension property is £0. The pension scheme administrator also responds after receiving the necessary evidence with the basic information required by the regulations. They inform Grace that the value of the notional pension property is £50K, being the value of the flexi-access drawdown account at the date of death.

The value of Asha’s free estate, including the notional pension property, is below the available nil rate band, therefore, an Inheritance Tax account is not required. Grace does not need further information to proceed with her application for probate.

Example 2 — pension scheme administrator learns of death from scanning

Robin (aged 68) has two money purchase schemes pensions. He has crystallised one to purchase an annuity. The other remains uncrystallised, although no contributions have been made to it for 10 years.

Following Robin’s death, his personal representatives contact the pension scheme paying the annuity. However, because there is no recent activity on the uncrystallised pension and Robin did not keep detailed records, they are unaware of its existence.

The pension scheme for his uncrystallised pension undertakes regular death-monitoring checks. Eight weeks after Robin’s death, its checks identify that the death has occurred. The pension scheme administrator follows their procedures for identifying and contacting the personal representative or a family member.

A family member responds and provides details of the personal representative. The pension scheme administrator then contacts the personal representative.

Once the personal representative provides the required evidence and requests the basic information, the standard process continues.

3.2 Personal representative verification

A pension scheme administrator will need to be satisfied that an individual has authority to act on behalf of the estate. They will also need to establish whether the individual is acting as a personal representative or a prospective personal representative.

The pension scheme administrator should request such information and documentation as they reasonably require evidencing a person’s identity and to satisfy themselves that a person has authority to act on behalf of the estate. Once such reasonable information and documentation have been provided to the pension scheme administrator, any applicable response period set out in the regulations will begin. If there is an issue or challenge during the identification process, the pension scheme administrator should inform the individual as soon as possible.

Pension scheme administrators should take reasonable steps to ensure that an individual has authority to act on behalf of the estate.

HMRC is preparing guidance to assist in evidencing a personal representative’s authority and identity and a draft copy is in Annex A.

If there is a valid Will, but no named executor is able and willing to act, another person will be entitled to apply for the grant of representation, such as the residuary beneficiary. Such a person may act as a prospective personal representative where they have reason to believe that they will become a personal representative. The existing Will may be used as supporting evidence as part of their identification process. Further information is set out in Annex A.

Where multiple personal representatives are administering the estate, pension scheme administrators may wish to consider whether it is appropriate to correspond with one lead person only. This will depend on the circumstances of the case.

Example 3: Multiple executors

Rohan (aged 59) dies leaving a money purchase pension. His son, Arjun, and daughter, Maya, are both beneficiaries of the estate and are named as joint executors in Rohan’s Will. Arjun intends to act as personal representative.

Arjun contacts the pension scheme administrator to notify them of Rohan’s death and requests basic information about the pension, including the value of the notional pension property. The pension scheme administrator asks Arjun to provide evidence of his identity and authority to act. Arjun provides his proof of identity and a copy of Rohan’s Will; he also supplies evidence of Maya’s identity and a signed written statement from her confirming she consents to the pension scheme administrator corresponding with Arjun, as he is acting on behalf of them both.

As the evidence of identity and authority to act were provided alongside the request, the pension scheme administrator treats the request as valid and continues to correspond with Arjun on behalf of the estate. If later, Maya wishes to make a request for information or submit a notice, as the pension scheme administrator has already received evidence of her identity and authority to act, no further evidence is required.

3.3 Prospective personal representatives

If the deceased did not leave a Will, or if all the named executors are unable or unwilling to act, an individual who has reason to believe they will become the personal representative (“prospective personal representative”) can request information from the pension scheme administrator. The pension scheme administrator must be satisfied as to the individual’s identity before providing information.

As with personal representatives, the pension scheme administrator will need to take reasonable steps to ensure that an individual has the authority to act as a prospective personal representative. HMRC intends to provide guidance to support this process, and a draft copy is at Annex A.

If a prospective personal representative withdraws and indicates that another individual will be acting on behalf of the estate, the pension scheme administrator must then verify the identity of the new individual before proceeding. They must be satisfied the new applicant is a personal representative or prospective personal representative.

Example 4: Intestacy

Mark dies aged 80. He is a widower and leaves two sons, Daniel and Aaron. He had two pensions. The first was a defined benefit scheme paying a scheme pension — which ceased at his death. He had a second small money purchase scheme that still had funds in a drawdown account. He did not leave a Will.

Daniel and Aaron agree that Aaron will administer the estate.

Aaron contacts both pension schemes to inform them of the death and supplies appropriate documentation that demonstrates he has the authority to act as a prospective personal representative. This includes evidence of his identity, along with a signed declaration that he believes Mark did not leave a valid Will, that he has reason to believe he will become a personal representative, and that he is administering the estate alone. Aaron also explains that he believes he will become a personal representative as he is one of Mark’s two sons, who have agreed he will administer the estate, and Mark left no surviving spouse. Following receipt of satisfactory evidence of identity and authority, the defined benefit scheme responds to Aaron to confirm there is no notional pension property. The money purchase scheme confirms that the value of the notional pension property is £20,000.

Example 5: Death of executor

Olivia (aged 71) dies leaving no dependants or close family. She had several pensions. Under her Will, most of her estate is left to a named local charity, but she also left small bequests to two friends, Samantha and Cillian. The sole executor named in the Will, Samantha, has also died, and no replacement personal representative has yet been appointed.

As the named executor has died, Cillian contacts the pension scheme administrators as a prospective personal representative and requests information relating to Olivia’s pension. Cillian has to provide evidence of his identity, a copy of the Will demonstrating he is a named surviving beneficiary, and a signed declaration confirming that the named executor has died and explaining why he has reason to believe he will become the personal representative rather than anyone in a higher category in the order of entitlement under rule 20 of the Non-Contentious Probate Rules 1987.

Following receipt of satisfactory evidence, the pension scheme administrators accept Cillian’s request and correspond with him regarding the estate.

3.4 What pension scheme administrators should do if they receive no contact from personal representatives

If the pension scheme administrator has not been contacted by a personal representative, the pension scheme administrators must proceed to identify beneficiaries in accordance with the scheme rules. Once a beneficiary has been identified and even though there has been no contact from any person administering the estate, the pension scheme administrator should distribute the benefits without further delay.

In such circumstances, it is recommended that the pension scheme administrator should inform the beneficiary that:

• the identity of the personal representative is not known to the pension scheme administrator
• the pension benefits may be subject to Inheritance Tax, and
• they should make enquiries to establish who is responsible for administering the estate and whether they have any Inheritance Tax liability

Example 6: No contact from personal representative, distribute benefits

Gareth dies at age 51, leaving his partner, Lucy, and three teenage children. He did not leave a Will. He was a member of a money purchase pension scheme through his employment and had completed an expression of wishes nominating Lucy as his beneficiary.

Lucy contacts his pension scheme to notify them of his death but tells them she is not administering the estate. The pension trustees begin their discretionary process and establish the value of Gareth’s notional pension property.

As Lucy has decided not to administer the estate, one of Gareth’s brothers, Max, takes responsibility for administering the estate.

When the trustees complete the discretionary process, the pension scheme administrator has not received any communication from Max. They therefore distribute the pension death benefits to Lucy 12 weeks after Gareth’s death. She chooses to receive the benefits through a dependant’s drawdown account.

When making the payment, the pension scheme administrator informs her of the value of the notional pension property. They also explain that the pension may be subject to Inheritance Tax and recommends that she share this information with the person administering the estate. In addition, they explain that the personal representative can contact the pension scheme administrator to request the information available under the regulations.

As Max is administering the estate, he meets the definition of personal representative under section 989 of the Income Tax Act 2007 and can request information from the pension scheme. He will need to apply for letters of administration to be formally appointed as an administrator to deal with Gareth’s estate.

4 Basic information sharing requirements

4.1 Introduction

The statutory requirement to respond to information requests should not be taken as preventing pension scheme administrators and personal representatives communicating in other ways. This sets the legal minimum.

The first information-sharing requirement relates to information needed to value the deceased’s estate and determine whether an Inheritance Tax account may be required (‘basic information’).

The information that must be provided is set out in regulations 10C(2) and 10D(2). This includes the value of the notional pension property, and whether any of this is going to potentially exempt beneficiaries (see section 4.3).

The response periods described below begin only once a valid request has been received. Therefore, the pension scheme administrator needs to have evidence that the person requesting the information is a personal representative (or prospective personal representative (section 2.1 and section 3)). If the evidence of identity has already been supplied, or accompanies the notice, the response period will start on receipt of the notice.

The value (or estimated value) of the notional pension property, together with the other information specified in regulations 10C and 10D that is available at the time of the request, must be provided within 28 days beginning with the day on which the request is received. Information relating to potentially exempt beneficiaries must also be provided within that period where all the beneficiaries have already been identified. If all the beneficiaries have not been decided when the request was received, the information must instead be provided within 14 days beginning with the day on which the beneficiaries are determined in accordance with the scheme rules or the terms of the insurance policy.

4.2 The basic information —administrative details

Scheme name

Regulation 10C(2)(a) requires the pension scheme administrator to provide the name of the pension scheme and the name and address of the scheme administrator. The address should be the address of the scheme administrator for correspondence purposes.

Investment-regulated pension schemes

Regulation 10C(2)(c) requires the pension scheme administrator to state whether the pension scheme is an investment-regulated pension scheme. Here, ‘investment-regulated pension scheme’ has the meaning given in Part I of Schedule 29A to the Finance Act 2004. Pension scheme administrators should simply confirm to the personal representative whether the scheme is an investment regulated pension scheme or not.

4.3 The basic information — value of the notional pension property

As set out in section 3.2 of technical note 1, pension scheme administrators and insurance companies may wish to begin establishing the value of any notional pension property and identifying potential beneficiaries as soon as they become aware of the member’s death. This can help ensure that information is available promptly if it is later required for Inheritance Tax purposes.

Pension scheme administrators and managers of insurance companies should use the calculation set out in section 150A of the Inheritance Tax Act 1984 to establish the value of the deceased member’s notional pension property.

To calculate the value of the notional pension property, administrators or managers must determine the value held under all arrangements within the scheme and deduct any excluded benefits. Further information on the treatment of specific types of excluded benefits is provided below. Benefits paid to exempt beneficiaries should not be deducted.

If the notional pension property relies, in any part, on an estimated value, regulations 10C(2)(e) and 10D(2)(d) require pension scheme administrators or managers of insurance companies to provide an explanation (including a reason for using the estimate and how it’s been reached) alongside the estimated value. They must confirm the final valuation within 14 days of the actual value being ascertained.

Example 7: Valuation including a death in service benefit

Mark dies aged 62. He leaves a spouse, Luke. He has two pensions, both money purchase. He has nominated Luke as his beneficiary with both pension schemes.

His employment related pension scheme provides a death in service benefit of 2.5 x annual salary (£65,000 when he died). The value of the pension pot fund in this money purchase scheme was £200,000. There is no augmentation offered by the trustees.

The pension scheme administrator calculates the notional pension property as £200,000.

Mark’s other money purchase scheme was not related to his current employment. The value in this pot was £75,000 and there was an additional lump sum of £25,000, as he died before retirement age. The pension scheme administrator calculates the notional pension property as £100,000.

The notional pension property is £300,000 (so £200,000 + £100,000).

Dependants’ scheme pensions

Section 3.3.1 of technical note 1 set out when a dependants’ scheme pension is an excluded benefit.

For a dependants’ scheme pension to qualify as an excluded benefit, the benefit must only be payable as an excluded benefit (section 150A(6) of the Inheritance Tax Act 1984). Therefore, when a beneficiary has the choice of another type of death benefit, such as using the funds to purchase a dependants’ annuity, even if they subsequently choose a dependants’ scheme pension, it will not be an excluded benefit. Regardless of whether they are excluded benefits, dependants’ scheme pensions are taxable as pension income in the hands of the beneficiary.

There is no requirement for a dependant’s scheme pension to be paid at a constant rate. A dependant’s scheme pension may therefore still be an excluded benefit where it is initially paid at one rate and subsequently reduced, provided all the other statutory conditions are met.

Death in deferment

If a member dies while in deferment, most death benefits or unused pension funds payable on their death will be within scope for Inheritance Tax. Lump sum death benefits payable following the death of a deferred member will not normally qualify as a death-in-service benefit and will not be excluded benefits. Dependant scheme pensions, however, will be an excluded benefit.

An individual who has left active service under a redundancy package may continue to be treated as employed for these specific purposes under the terms of the redundancy package or scheme rules. Where this results in a lump sum death benefit being payable as a death in service benefit, the benefit may qualify as an excluded benefit. This will depend on the terms of the redundancy package or scheme rules.

4.3 The basic information — reporting potentially exempt beneficiaries

Regulations 10C(2)(f) and 10D(2)(e) require pension scheme administrators and managers of insurance companies to provide information about the proportion of the notional pension property that is expected to pass to potentially exempt beneficiaries.

When requested, the pension scheme administrator must provide details of the percentage of the notional pension property that is expected to pass to:

• charities or registered clubs
• surviving spouse or civil partner
• any other exempt beneficiaries

Pension scheme administrators or managers need only identify the proportion of notional pension property expected to pass to that category of beneficiary. They are not required to determine whether a transfer to a surviving spouse or civil partner qualifies as exempt from Inheritance Tax. Where the beneficiary is a charity, registered club or other exempt beneficiary, this should be determined with reference to publicly available information.

This information must be provided within 28 days beginning with the day on which the request is received, or if later, within 14 days beginning with the day on which all beneficiaries have been determined, in accordance with the scheme rules or insurance contract.

For the purposes of regulations 10C(4) and 10D(4), beneficiaries are treated as having been determined once the trustees or managers have completed their discretionary process and decided how the deceased member’s benefits or unused funds are to be distributed. The 14-day period begins on that date. Regulations 10C and 10D do not require pension scheme administrators or managers to provide updated information if the intended distribution changes. However, where a change affects the proportion expected to pass to exempt beneficiaries, pension scheme administrators or managers may want to inform the personal representative of the revised position. As detailed under section 6 (Further information – when an Inheritance Tax account is required), pension scheme administrators will need to provide this information if a request is made under regulations 10E and 10F.

5 Initial assessment of Inheritance Tax liability

5.1 Introduction

Personal representatives will need information about a deceased member’s pension benefits when determining the Inheritance Tax position of the estate. The process of gathering information from pension scheme administrators is likely to take place alongside the valuation of the deceased’s other assets and liabilities.

Once sufficient information has been obtained, the personal representative can determine whether an Inheritance Tax account is required. HMRC publishes tools to assist personal representatives through this process.

5.2 Apportionment

The charge to Inheritance Tax on a person’s death is calculated on the total value of a person’s estate. This brings together property in different legal ownership, but to which the person was beneficially entitled, or treated as being beneficially entitled, on their death. The tax on the total estate is then apportioned between the different elements which make up the estate to establish the tax attributable to the respective elements. HMRC will create an online tool to help personal representatives determine the amount of nil rate band attributable to notional pension property, which in turn will allow the tax attributable to that property to be calculated.

5.3 Valuation

Regulations 10C and 10D provide that pension scheme administrators may use estimated values where final values are not yet available. Where an estimated value is used, the pension scheme administrator should explain why the value is estimated and provide an updated value once the final value is known. This may arise, for example, where a potential augmentation adjustment is being considered but the trustees have not yet determined whether an augmentation will be made or, if so, its value.

Pension scheme administrators should apply the appropriate valuation methodology to each arrangement in which the member held rights. Where a member had both defined benefit and money purchase arrangements under the same scheme, each arrangement should be valued separately and the total values reported to the personal representative.  

The value of a member’s notional pension property is determined as at the date of death. As a result, it may differ from the benefits ultimately received by beneficiaries.

Death of a beneficiary

Once notional pension property is vested in a beneficiary, that property will form part of their estate when they die. ‘Vested’ for these purposes is defined in section 2.1 of technical note 1. When a beneficiary inherits pension from a deceased member, they will make decisions as to how to take those benefits — although these will be from options determined by the terms and nature of the deceased’s pension arrangements.

However, this means that even if the original member died before 6 April 2027, if one of their beneficiaries dies after 6 April 2027, any remaining pension death benefits they inherited (for example, in a beneficiary drawdown account), will need to be considered as part of the beneficiary’s notional pension property alongside their own pensions.

Example 8: Beneficiary in receipt of beneficiary’s pension death benefit dies

Agatha (aged 70) dies on 4 July 2026. Her estate will be split between her daughter and son, Florence and David. She had a money purchase pension, with £400,000 left in a flexi-access drawdown account.

As her death was before 6 April 2027, there is no Inheritance Tax liability in relation to her pension. However, an Inheritance Tax liability did arise in respect of her wider estate.

Agatha had nominated Florence and David to receive her pension in equal shares. Following the discretionary process, they both receive £200,000. Both opt to put the money into a beneficiary’s drawdown account.

When David dies (aged 55) on 1 November 2030, there is still money left in his beneficiary’s drawdown account. He had nominated his children as beneficiaries for this account. The money in the account on his death is included in the value of his notional pension property and added to his other unused pension funds or pension death benefits.

6 Further information — when an Inheritance Tax account is required

6.1 Introduction

If an Inheritance Tax account is required, the personal representative (including whoever is administering the estate) will need to obtain further information from the relevant pension scheme administrator. This information is required to complete the Inheritance Tax account, which may be required even if there is no Inheritance Tax liability. Where an Inheritance Tax account is required, they should request the further information, prescribed by the regulations, from the relevant pension scheme administrators.

There is no statutory deadline by which this request must be made. In some circumstances, the basic and further information requests (detailed in sections 4 and 6 of this note) may be made at the same time or made alongside a withholding notice. Where there is no notional pension property and excluded benefits are not being paid, pension scheme administrators should confirm this in response to the joint request. If there are only excluded benefits being paid, the pension scheme administrator must still provide the information relating to those excluded benefits to the personal representative.

6.2 Overview of legislation

Regulations 10E and 10F set out the information requirements that pension scheme administrators and insurance companies, respectively, must provide to personal representatives on request. The information is listed in regulations 10E(3) and 10F(2).

This includes information about the beneficiaries. Personal representatives require this information to complete the Inheritance Tax account. Individuals who receive benefits derived wholly or partly from notional pension property are jointly liable (alongside the personal representative) for any Inheritance Tax attributable to those benefits. Where regulations 10E(3)(f) and 10F(2)(f) require the value and percentage attributable to a beneficiary to be reported, these should be calculated by reference to the member’s notional pension property and not the value of the benefits the individual received or will receive.

The information requested under regulations 10E and 10F must be provided by the later of 28 days beginning with the day on which the request is received, or 14 days beginning with the day on which all beneficiaries have been decided. For example, if beneficiaries are decided on day 21 following receipt of the request, the information must be provided within 14 days of the date of decision (effectively 35 days after receipt).

As explained in section 4.3 (Basic information — reporting potentially exempt beneficiaries), beneficiaries are identified when the initial decision on the distribution of benefits has been made in accordance with the scheme rules or insurance contract. Pension scheme administrators should not wait until beneficiaries have accepted the benefits before providing information.

Where a beneficiary is a trust

Where a trust is a beneficiary, details of the trust should be provided to the personal representative as the trust may be liable for Inheritance Tax attributable to the notional pension property. If, when the decision on beneficiaries is made, full details of the trust are not yet available, the pension scheme administrator should still respond within the applicable deadline providing the information available at that time. Where any information is provisional, the pension scheme administrator should provide updated information as soon as possible, once final details are known. Further information on trusts will be included in a future technical note.

6.3 The further information — reporting of excluded benefits

Although excluded benefits are not included in a deceased member’s notional pension property, pension scheme administrators must provide information about them to personal representatives if requested under Regulations 10E and 10F. This information is required to enable personal representatives to correctly complete the Inheritance Tax account and demonstrate why certain benefits have been excluded from the Inheritance Tax calculation. Regulations 10E(3)(g), 10E(4) to (6) and 10F(2)(g) set out the information that must be provided in relation to excluded benefits.

Excluded benefits: pension scheme reporting

Regulation 10E(4) lists the relevant excluded benefits. In response to a further information request, pension scheme administrators should indicate whether any of the following benefits have been paid, or will be paid, and provide the information specified in the regulations:

• dependants’ scheme pension (see section 4.2 (The basic information — value of the notional pension property)) — the initial annual rate payable
• trivial commutation lump sum death benefit derived from the commutation of a dependants’ scheme pension — pension scheme administrators need only indicate whether such a payment has been made or is intended to be made. The reporting requirement applies based on the position at the time the response is provided. If a beneficiary subsequently chooses to commute a pension after the response has been given, there is no requirement for pension scheme administrators to provide an updated response to the personal representative
• a dependants’ annuity or nominees’ annuity purchased together with the lifetime annuity — the initial annual rate payable
• a death in service payment — the amount payable to each beneficiary. Where multiple payments are made to the same beneficiary, pension scheme administrators may report the total amount payable to that beneficiary, rather than each payment

There is no requirement to provide the identities of beneficiaries receiving excluded benefits as they are not beneficiaries of the deceased’s notional pension property and this information is not required for an Inheritance Tax account.

Where there is no notional pension property but excluded benefits are being paid, the pension scheme administrator must still respond to the further information request and provide the information required under regulations 10E(3)(a), (b) and (g).

Excluded benefits: insurance companies reporting

Regulation 10F(2)(g) sets out the information that insurance companies must provide in relation to excluded benefits.

For insurance companies, this requirement is limited to information about a dependants’ annuity or nominees’ annuity purchased together with the member’s lifetime annuity. Where such an annuity is being paid, or will be paid, the insurance company must provide the initial annual rate.

Where there is no notional pension property, but an excluded-benefit annuity is being paid, the insurance company must still respond to the request for further information. In these circumstances, they need only include the information required by regulations 10F(2)(a), (b) and (g).

7 Withholding

7.1 Introduction

For a withholding notice to be valid, it must contain the information prescribed by HMRC as to form and content. In this context, ‘prescribed’ means specified by HMRC in guidance. The information that HMRC intends to prescribe is included in the draft template at Annex B. Pension schemes may develop their own template or incorporate the requirements into existing customer processes and digital interfaces. However, any notice must contain, as a minimum, the information set out in the draft template.

Where a pension scheme administrator fails to comply with a valid withholding notice, they will become jointly liable for the Inheritance Tax attributable to the relevant pension death benefits.

Withholding notices may only be issued in relation to registered pension schemes. The withholding provisions do not apply to insurance companies that are not registered pension schemes.

7.2 Validity of notice

If the pension scheme administrator considers the notice to be invalid, they must notify the individual who submitted to rectify. They must do this within 14 days of receiving it and explain why they consider the notice to be invalid (see section 6 (What should be included in a valid notice) of technical note 1).

7.3 Provision of information following receipt of a withholding notice

Regulations 10G and 10I set out the information that pension scheme administrators must provide following receipt of a valid withholding notice.

Regulation 10H covers the information that must be provided to a personal representative, or prospective personal representative, where some or all of the deceased member’s rights are to be included, or have been included, in a relevant transfer to another pension scheme or insurance company.

Pension scheme administrators may choose to provide additional information beyond the statutory requirements. For example, they may wish to explain the purpose and effect of a withholding notice. HMRC will publish supporting materials that schemes may share with beneficiaries or use when developing their own communications.

Personal representatives and prospective personal representatives should be aware that, under regulation 10I, pension scheme administrators must provide beneficiaries with the name and address of the person who gave the valid withholding notice. The withholding notice template at Annex B (withholding notice) includes a declaration confirming that the person submitting the notice is aware of this requirement.

7.4 Provision of information — points of detail

Regulation 10G sets out that where beneficiaries have been identified in accordance with the scheme rules, the information provided to the personal representative, or prospective personal representative, must include the name of each beneficiary and the amount withheld from them.

Where beneficiaries have been decided, it is only where the withholding notice is impacting them should their names and the amount be shared with the personal representative who gave the notice. If they have not been identified when the withholding notice is received, pension scheme administrators are not required to provide this information at a later time solely for the purposes of regulation 10G. However, beneficiary information will be provided in response to a request for further information under regulation 10E or 10F.

For the purposes of regulation 10G(5)(c), a beneficiary is “decided in accordance with the scheme rules,” where the scheme has determined that the individual is entitled to receive benefits under those rules. This includes both beneficiaries with an absolute entitlement under the scheme rules and beneficiaries who have been selected following the scheme’s discretionary process.

7.5 Timing

As set out in regulation 10G, where a pension scheme administrator accepts a notice as valid, they must notify the personal representative, or prospective personal representative, of this within 14 days of receiving the notice.

Within 28 days of receiving the notice, the pension scheme administrator must also provide the total amount being withheld under the notice, whether that amount is based on a provisional estimate of the notional pension property, and, where beneficiaries have been decided, the name of each beneficiary and the amount withheld from them.

As set out in regulation 10I, where the pension scheme administrator has accepted a notice as valid, they must provide the prescribed information to any beneficiary who has been decided within 14 days of receiving the notice. If a beneficiary has not been decided when the notice is received, but the notice remains in force when the decision that they are beneficiary is made, the prescribed information must be provided within 14 days of that identification. Pension scheme administrators must communicate with each beneficiary as soon as possible.

Example 9: Responding to requests and notices

Chigor dies (age 75) on 1 August 2027. His son, Adebayo, is named as executor in his Will. He is survived by his wife Hauwa, Adebayo, and two daughters, Aisha and Alheri, from a previous marriage. He has rights under a money purchase pension scheme and a joint-life annuity, under which his wife is the surviving life.

Adebayo finds records relating to the money purchase pension scheme and notes that all three children have been nominated as beneficiaries.

He contacts the pension scheme administrator to request the basic information under regulation 10C and submits a withholding notice using the scheme’s online form. As requested by the pension scheme administrator, he also provides evidence of his identity and status as personal representative. The scheme administrator receives the request, notice and supporting documentation on 1 September 2027.

Having checked that the withholding notice is valid and that all required documentation has been provided, the pension scheme administrator responds to Adebayo as follows:

• on 14 September 2027, within 14 days of receiving the notice, they notify him that the withholding notice has been accepted as valid
• on 27 September 2027, within 28 days of receiving the request, they provide the information required under regulation 10C. This includes the value of the notional pension property, all of which is held in a drawdown account, and confirmation that 50% of the notional pension property has been withheld

On 1 November 2027, the scheme trustees decide to distribute the death benefits equally between Hauwa and Adebayo, Aisha and Alheri.

On 5 November 2027, the scheme administrator notifies the beneficiaries of their entitlements.

• Hauwa (as an exempt beneficiary) is entitled to £50,000. She chooses to transfer the money to a beneficiary drawdown account
• Adebayo is entitled to £50,000. 50% is withheld following receipt of his withholding notice. He also chooses to transfer the money to a beneficiary drawdown account
• Aisha and Alheri are also entitled to £50,000 each. 50% is withheld following receipt of Adebayo’s withholding notice. They are made aware of their options and informed that Adebayo issued the withholding notice

7.6 Amount withheld

A withholding notice applies to all unused pension funds and pension death benefits, other than excluded benefits and benefits payable to exempt beneficiaries. The personal representative or prospective personal representative are asked to provide information about the exempt status of surviving spouses or civil partners if it is known (see draft withholding form Annex B) to expedite payments to exempt beneficiaries.

The amount withheld from each beneficiary is determined by reference to the share of the member’s notional pension property allocated to that beneficiary. Where there are known exempt beneficiaries, the proportion attributable to those beneficiaries is not subject to withholding. The amount required to be withheld may change if an exempt beneficiary is identified after the notice has been accepted. In these circumstances, there is no legal requirement for the pension scheme administrator to update the person who issued the notice. However, schemes may wish to do so to assist personal representatives, or prospective personal representatives, and reduce the risk of invalid payment notices or unnecessary requests for further information. As detailed under section 6 (Further information — when an Inheritance Tax account is required), pension scheme administrators will need to provide this information if a request is made under regulations 10E and 10F.

Example 10: Withholding with multiple beneficiaries

Anne (age 79) dies on 4 July 2027. Under her Will, her estate is divided between her niece, Kelly, and her two nephews, Ryan and Andrew. Kelly is entitled to 60% of the estate, while each nephew is entitled to 20%. She made an identical nomination to her money purchase pension scheme. She has notional pension property consisting of unused funds of £300,000 in the scheme on her death.

Anne’s solicitor is acting as personal representative. Having valued the estate, including the notional pension property, he concludes that an Inheritance Tax account is required and issues a withholding notice to the pension scheme administrator.

The pension scheme administrator applies withholding to the whole pot. The trustee subsequently appoints Kelly, Ryan and Andrew as the beneficiaries, split 60:20:20 as per Anna’s nomination.

This means that whilst the withholding notice has effect, Kelly can take £90,000 (50% of £180,000). Ryan and Andrew can both take £30,000 (50% of £60,000). However, the value of the pension pot has increased by £12,000 since Anne’s death. The withholding notice only applies to the notional pension property which is determined at the date of death. Kelly, Ryan and Andrew can take their portion of this £12,000 as this is not part of the notional pension property and therefore is not covered by the withholding notice.

Once the Inheritance Tax liability has been paid, whether from the notional pension property or from another source or the withholding notice is withdrawn or lapses, the withheld amounts may be released and paid to the beneficiaries in accordance with their entitlement.

7.7 Benefits already paid

A withholding notice can only apply to benefits that have not already been paid. Benefits held in an ‘unsecured’ arrangement are not treated as having been paid for these purposes. An unsecured arrangement is one where it hasn’t been converted into a guaranteed income stream such as an annuity. For example, a beneficiary’s drawdown account would be considered as unsecured. However, where benefits have been used to provide a secured pension benefit, they are treated as having been paid and are therefore outside the scope of any subsequently issued withholding notice.

If a valid withholding notice is received after all relevant benefits have been paid, the pension scheme administrator cannot withhold any amount. However, they must still respond to the person who gave them the notice within the deadlines set out in regulation 10G(3) and 10G(6). In these circumstances, the information provided should make clear that the relevant benefits had already been paid when the notice was received and that no amount has been withheld as a result.

Where only some benefits have been paid before the notice is received, the withholding notice applies only to benefits that remain payable after receipt of the notice. The pension scheme administrator should confirm these amounts within 28 days of receiving the notice.

7.8 Information exchange when withheld pension rights are, or are to be, included in a relevant transfer

Regulation 10H sets out the information-sharing requirements that apply when a pension scheme administrator has received a withholding notice and the deceased member’s rights are, or are to be, transferred. This includes transfers to another pension scheme or insurance company. For the purposes of regulation 10H, a ‘relevant transfer’ is defined in regulation 10H(5).

When rights to benefits under a scheme are transferred to another pension scheme or insurance company, any withholding notice will cease to have effect in relation to the transferred rights. Personal representatives, or prospective personal representatives, must therefore be informed of the transfer.

Regulation 10H applies where a pension scheme administrator has either accepted a withholding notice as valid or has received a notice but not yet determined its validity. Regulation 10H(3) sets out the information that must be provided. This includes details of the new scheme and its pension scheme administrator, and the date of the transfer. The information must be provided to the person who submitted the notice by the later of 14 days beginning with the date of transfer, or 14 days beginning with the day on which the withholding notice was received.

8 Pensions Direct Payment Scheme

8.1 Introduction

For a payment notice to be valid, it must contain the information prescribed by HMRC. In this context, ‘prescribed’ means specified by HMRC in guidance.

The information that HMRC intends to prescribe is included in the draft template at Annex C of this technical note. Pension schemes may develop their own template or incorporate the requirements into existing customer processes and digital interfaces. However, any notice must contain, as a minimum, the information set out in the draft template. Furthermore, if any notice does contain the information set out as required in HMRC guidance, it meets this requirement, irrespective of what other information is provided. Personal representatives and pension beneficiaries (including trustees) will be able to issue payment notices. There are no deadlines for submitting a payment notice and they are independent of any withholding notices that may also be in place. A prospective personal representative cannot issue a payment notice.

Payment notices may only be issued in relation to registered pension schemes.

Example 11: single beneficiary

Evan dies on 23 April 2027, aged 81. His brother Philip is his personal representative. He informs the pension scheme administrator on 12 May 2027 about his brother’s death and requests the value of the notional pension property.

On 4 June 2027, the pension scheme administrator tells the personal representative the value of the notional pension property for Inheritance Tax, and that the trustees have confirmed he is the sole beneficiary of the pension.

Philip adds the pension value to the value of the rest of the estate and determines that an Inheritance Tax account is required. He submits the account. HMRC issues calculations for the free estate and for the pension.

The Inheritance Tax liability is £275,000, with £27,500 being due on the notional pension property. As it is now after 31 October 2027 (6 months after the end of the month of death), interest has begun to accrue and is included in the HMRC calculation.

Philip inherits under the Will and is the beneficiary under the pension scheme. He chooses to use the pensions direct payment scheme to simplify his income tax position. He sends a completed payment notice to the pension scheme administrator for £27,600 (which includes £100 interest). The pension scheme administrator reports and pays £27,600 to HMRC. Philip then chooses to put his remaining inherited pension into a beneficiary drawdown account.

Failure to pay a valid payment notice

Where a pension scheme administrator fails to comply with a valid payment notice, they will become jointly liable for the Inheritance Tax (and interest) that they failed to pay, in accordance with section 210(3)(b)(ii) Inheritance Tax Act 1984.

Example 12: failure to pay and liability

Walter dies on 23 April 2027, aged 77. His brother, John, is his personal representative. John informs the pension scheme administrator of his brother’s death. Walter had nominated his godchild, Jane, as his pension beneficiary with a letter to pension trustees and his brother explaining his wishes.

On 4 June 2027, the pension scheme administrator tells the personal representative the value of the notional pension property.

The pension trustees start their discretionary process. They decide to follow Walter’s wishes and appoint Jane as sole beneficiary. The pension scheme administrator informs Jane and the personal representative in October 2027.

Meanwhile, John adds the pension value to the value of the rest of the estate, and determines that an Inheritance Tax account is required. He submits the account to HMRC on 30 November 2027. On 12 December 2027, HMRC issues calculations for the free estate and for the pension. Interest has started to accrue as it is now after 31 October 2027 (being 6 months after the end of the month of death).

John shares the calculations for the pension Inheritance Tax liability with Jane, showing her liability of £37,500.

Jane chooses to use the pensions direct payment scheme and sends her payment notice to the pension scheme administrator. The pension scheme administrator receives the notice on 15 December 2027. On 19 December, they tell Jane her notice is valid, and that they will pay the Inheritance Tax to HMRC.

By 10 February 2028, neither John nor Jane have received confirmation that the pension scheme administrator has paid the amount included in her payment notice. Jane contacts the pension scheme administrator but gets no response.

John contacts HMRC on 15 February 2028 and explains that the pension scheme administrator might not have made the payment requested in Jane’s (the beneficiary’s) payment notice. HMRC confirm that they have not received a payment from the pension scheme administrator. This means that that the pension scheme administrator, is now jointly liable for the £37,500, in accordance with section 210(3)(b)(ii) of the Inheritance Tax Act 1984. Following contact from both Jane and John, the pension scheme administrator pays the £37,500 to HMRC and reimburses John for the additional interest to avoid a complaint.

8.2 Validity of a payment notice

If a payment notice is invalid, pension scheme administrators should inform the personal representative or pension beneficiary who gave the notice as soon as reasonably practical.

The 35-day period for a pension scheme administrator to pay the amount specified in the payment notice does not begin to run until a valid notice has been received. Section 226B(2)(b) of the Inheritance Tax Act 1984 provides that the 35-day period begins on the day the notice is received, unless the notice does not comply with the requirements of section 226B(3). Those requirements are explained in section 7.3.2 (What should be included in a valid notice) of technical note 1.

The pensions direct payment scheme may only be used where the Inheritance Tax (and interest) liability being paid is at least £1,000. A payment notice for a lower amount will be invalid. Where the amount due is less than £1,000, the personal representative or beneficiary must make the payment directly to HMRC through other sources. To be valid, there must be sufficient funds left within the scheme as set out earlier in section 7.7.

A pension scheme administrator must comply with a valid payment notice, even if the notice is disputed by another person. For example, a pension scheme administrator must comply with a valid payment notice from a personal representative even if a beneficiary disagrees with paying the Inheritance Tax due directly from the pension.

Example 13: refusing requests

Doris dies aged 87 on 17 January 2028. She is widowed and leaves two children, Peter and Mary.

Her solicitor is her personal representative. He establishes that, including her unused money purchase pension, £70,000 Inheritance Tax is due. £7,000 of this is due on the notional pension property. The personal representative informs Peter and Mary and the pension scheme administrator that Inheritance Tax is due and an Inheritance Tax account is required. The account is submitted in April and HMRC issues an Inheritance Tax calculation in May.

Peter and Mary are appointed as beneficiaries within three months of the pension scheme administrator being notified of the death, in equal shares. The pension scheme administrator tells the beneficiaries about their benefit options and about the pensions direct payment scheme.

Both choose to use this scheme to pay £3,500 (there is no accrued interest as this is within 6 months of the death).

Peter sends his payment notice to the pension scheme administrator on 1 June, requesting the payment of £3,500. The pension scheme administrator checks the notice. All necessary details are included and there are sufficient funds within Peter’s benefit entitlement.

HMRC receives the payment on 10 June, and credit it to Doris’s Inheritance Tax account.

Mary sends her payment notice to the pension scheme administrator on 1 August. The pension scheme administrator checks the notice. Mary hasn’t provided the deceased’s details and the Inheritance Tax reference number. On 7 August, the pension scheme administrator informs Mary that the notice is not valid because information is missing.

On 10 September, Mary resends a payment notice to the pension scheme administrator, with the correct details, again for £3,500. HMRC receives the payment on 20 September, and credits it to Doris’s Inheritance Tax account.

There is interest due on Mary’s liability from 31 July 2028 to 20 September. Mary sends a new payment notice to the pension scheme administrator on 1 October for £20 interest. On 4 October, the pension scheme administrator informs Mary that the notice is invalid because it is for less than £1,000. Mary must pay the interest directly to HMRC through other sources.

8.3 Provision of information — payment notices

Regulations 10J to 10M set out the information sharing requirements that apply following a payment made through the pensions direct payment scheme.

Regulations 10J and 10K apply where the taxpayer giving the payment notice is a beneficiary. Regulations 10L and 10M apply where the taxpayer giving the notice is the personal representative.

Information sharing: beneficiary payment notice

The information that the pension scheme administrator must provide to the beneficiary who gave the payment notice is set out in regulation 10J(3). This includes the Inheritance Tax reference number, the amount paid (with any interest identified separately), the date of payment and the payment reference number allocated by HMRC. The payment reference number enables the beneficiary to identify and trace the payment where required. As set out in section 7.7 of technical note 1, HMRC will provide a payment reference number to the pension scheme administrator when they report receipt of a valid payment notice. The pension scheme administrator must then quote this reference number when they make the payment to HMRC.

The information must be provided within 14 days of the payment being made. Although a pension scheme administrator has 35 days from receipt of a valid payment notice to make the payment, this reporting requirement is linked to the date of payment rather than receipt of the notice.

Regulation 10K sets out the information that must be provided to the personal representative following a payment made in response to a beneficiary’s payment notice. This is the only circumstance in which a pension scheme may be required to provide information to a prospective personal representative in relation to a payment notice. This ensures that whoever is administering the estate is aware that a beneficiary has paid an Inheritance Tax liability using the pensions direct payment scheme and gives them the payment reference number so they can also trace the payment if needed.

Information sharing: personal representative payment notice

The information that the pension scheme administrator must provide to the personal representative who gave the notice is set out in regulation 10L(3). This includes the Inheritance Tax reference number, the amount paid (with any interest identified separately), the date of payment and the payment reference number allocated by HMRC. It must also include the amount by which each beneficiary’s entitlement has been reduced (where those beneficiaries have been decided), and if not all the beneficiaries have been decided, the total amount reduced for the scheme.

If the beneficiaries have been identified when a personal representative gives a payment notice, the payment notice should indicate their share of the Inheritance Tax (including interest). Pension scheme administrators can reasonably ask to see a copy of HMRC Inheritance Tax calculation, although personal representatives are not required to provide this and may submit a redacted version. Any payment requests should correlate with this calculation.

However, if the personal representative is seeking to pay in advance of beneficiaries being identified (for example, to reduce any interest accruing) they can ask for payment of the expected Inheritance Tax liability on full value of the notional pension property attributable to the deceased member in that scheme. However, personal representatives should be aware that if an exempt beneficiary is later appointed, they will need to work with the beneficiary to claim a refund of that amount from HMRC.

Regulation 10M(3) sets out the information that must be provided to beneficiaries where a payment notice has been given by a personal representative. This includes the contact details of the personal representative who gave the notice and the details of the Inheritance Tax and any interest paid in respect of their entitlement. Where personal representatives gave the notice jointly, the details of all acting personal representatives should be provided. In other cases, the details of the personal representative that gave the notice should be provided.

Where a beneficiary has been identified when the payment is made, the information must be provided within 14 days of the payment being made.

Where a beneficiary has not been identified until after the payment is made, the information must be provided within 14 days of the decision to treat that individual as a beneficiary in accordance with the scheme rules.

Payment notices may be issued by a personal representative before the beneficiaries have been identified based on their knowledge at the time. When considering a payment notice in this circumstance, the pension scheme administrator may need to consider whether it is likely that an exempt beneficiary will receive some or all the pension benefits. It is common for trustees to consider a surviving spouse or civil partner as a priority for receiving benefits. If, when beneficiaries are subsequently identified, one or more of them is an exempt beneficiary, pension scheme administrators should still report the amount of any Inheritance Tax and interest deducted from that beneficiary’s entitlement. The beneficiary must then work with the personal representative to claim a refund of that amount.

8.4 Overpayment

Payment notices may be issued before the Inheritance Tax liability has been finalised. For example, where the calculation is based on estimated values, or before beneficiaries (including exempt beneficiaries) are identified. Therefore, an overpayment of tax (and interest) may occur. In these circumstances, HMRC will make any repayment in accordance with section 241 of the Inheritance Tax Act 1984 and its normal repayment processes.

An overpayment of Inheritance Tax made using the pensions direct payment scheme will not be deducted from the wider Inheritance Tax liability. It will be returned to the personal representative to pay forward to the pension beneficiary.

8.5 Conflict with scheme rules

Under section 226B(8) of the Inheritance Tax Act 1984, any provision in the rules of a registered pension scheme is void to the extent that it would prohibit or restrict the payment of Inheritance Tax in response to a valid payment notice.

9 Income Tax on death benefits from pensions

9.1 Introduction

The basic principles governing the interaction between Inheritance Tax and Income Tax were explained in chapter 8 of technical note 1. Further guidance will be provided in a future technical note this autumn.

This section focuses on the changes to the information sharing requirements relating to a deceased member’s lump sum and death benefit allowance. Regulation 8 covers the information that pension scheme administrators must provide to personal representatives, and regulation 10 covers the information that personal representatives must provide to HMRC.

For the purposes of these regulations, ‘personal representative’ includes any person who is legally responsible for administering the deceased’s estate, as provided in section 989 Income Tax Act 2007.

9.2 Amendments to regulation 8

Regulation 8 (death: provision of information by scheme administrator to personal representatives) is amended to reflect the different ways in which beneficiaries may meet any Inheritance Tax liability and to make minor updates to the existing reporting requirements.

Pension scheme administrators must provide personal representatives with information about lump sum death benefits that expend the members lump sum and death benefit allowance. This is any relevant lump sum death benefit that is paid tax-free by the pension scheme administrator and would use part of the member’s lump sum and death benefit allowance.

Under regulation 8(1A), the pension scheme administrator must provide this information within three months of the payment of the final tax-free lump sum death benefit. The information that must be provided to the personal representative includes:

• name and contact details of the scheme and the pension scheme administrator
• any relevant reference number relating to the deceased member
• the amount of each relevant lump sum death benefit paid

Pension scheme administrators should provide personal representatives with the total amount of relevant lump sum death benefits paid. This is the amount actually paid after any reduction under section 226B Inheritance Tax Act 1984. They should contact either all personal representatives if they must act jointly or the lead contact.

This information enables the personal representative to determine whether the deceased’s lump sum and death benefit allowance has been exceeded. For this purpose, it is the total amount of the relevant lump sum death benefits paid that should be compared with the deceased’s available lump sum and death benefit allowance. Any Inheritance Tax implications are considered separately.

Where the personal representative believes the deceased’s lump sum and death benefit allowance has been exceeded, they should request further information from each pension scheme that has paid a tax-free lump sum death benefit. This information will enable the personal representative to meet the reporting requirement in regulation 10.

The information that must be provided on request is set out in regulation 8(2). The information is the details of the beneficiaries’ identity, for each of those individuals’ details about payments (for clarity this is the net amount actually paid) and for each of those payments how much (if any) they were reduced by because of an adjustment under a payment notice under section 226B of Inheritance Tax Act 1984. It is the information required by regulation 8(2)(c) that reflects whether, and to what extent, a beneficiary’s entitlement to a lump sum death benefit has been reduced to meet the Inheritance Tax liability.

HMRC will provide supporting guidance and other materials to assist personal representatives in applying these rules.

The information must be provided within one month beginning with the date on which the pension scheme administrator receives the request.

9.3 Amendments to regulation 10

Regulation 10 (death: provision of information by personal representatives to the Commissioners) has been amended. New regulation 10(2)(ca) requires personal representatives to tell HMRC whether any of the relevant lump sum death benefit payments were reduced because of an adjustment under section 226B(6) of the Inheritance Tax Act 1984.

Regulation 10(3)(b) has also been amended to increase the period for providing this information from 30 days to two months.

10 Clearance

10.1 Introduction

Personal representatives may be discharged from liability for Inheritance Tax relating to previously undiscovered pension benefits where they have obtained clearance from HMRC. In these circumstances, pension beneficiaries are liable for any Inheritance Tax on these newly discovered pension benefits and personal representatives are responsible for reporting them.

10.2 When to apply

Personal representatives should apply for clearance only where all the following conditions are met:

• after they have submitted the Inheritance Tax account, including accompanying schedules
• when they believe that all Inheritance Tax due has been paid
• when they believe that the estate values are final

In practice, this means they should not apply before both of the following are true:

• at least 12 months have passed since the date of death, and
• at least 3 months have passed since they’ve received the unique code for probate

These time limits help ensure that sufficient time has passed for previously unknown assets and liabilities, including pension benefits, to come to light and for any resulting Inheritance Tax liabilities to be settled before clearance is sought.

Personal representatives will be able to use a Clearance Checker tool to help determine whether they are ready to apply for clearance. This tool will be updated to account for pensions.

Once they have established that the conditions for applying for clearance have been met, personal representatives can apply for clearance using form IHT30.

Annex A: Draft guidance on personal representative identity

HMRC will publish the final version of this draft guidance in due course on GOV.UK.

Evidence of personal representative identity

Following the death of a pension scheme member, there are several points at which information may need to be exchanged between the pension scheme administrator and the persons managing the estate. These are:

• the initial valuation of notional pension property (provision of basic information)
• provision of further information if an Inheritance Tax account is required
• on receipt of a withholding notice
• where payment notices are given
• following the final payment of a relevant lump sum death benefit, where applicable, to determine whether the deceased member’s lump sum and death benefit allowance has been exceeded

The Registered Pension Schemes (Provision of Information) Regulations 2006 (SI 2006/567) require pension scheme administrators, personal representatives and prospective personal representatives (individuals who have reason to believe they will become personal representatives in cases where there is no named executor, or no willing/able executor, dealing with the estate administration) to exchange information. The regulations set out both the information that must be provided and the timescales for doing so.

At present, it is usual for a pension scheme administrator to require sight of the grant (that is Grant of Probate, Letters of Administration or Confirmation in Scotland) before disclosing information to a deceased member’s personal representative. From April 2027, pension scheme administrators will be required to respond to information requests, withholding notices and potentially payment notices before the grant is issued. Pension scheme administrators should take reasonable steps to satisfy themselves of a person’s identity and authority to act on behalf of the estate.

This draft material is guidance only. It is meant to assist pension scheme administrators in evidencing a personal representative’s authority and identity. However, this is not intended to provide an exhaustive list of appropriate evidence, and pension scheme administrators should consider other evidence where it is reasonable to do so. Pension scheme administrators should seek their own legal advice in respect of their own processes and procedures for establishing (prospective) personal representative identity and authority to act.

Evidence of identity

We anticipate pension scheme administrators will have their own requirements on acceptable forms of identification already in place and therefore we shall not comment further on this.

Evidence of authority to act

Information and documentation requested to evidence authority to act could include the following:

• death certificate confirming the date of death and name of deceased
• certified copy of the Will and any codicils (in cases where there is a valid Will)
• in cases where there is a valid Will and at least one named executor is administering the estate as the personal representative, a signed declaration by the executors stating the following:
  • confirmation that they have accepted the role of executor and intend to act as personal representative
  • confirmation that they believe the enclosed certified copy of the Will (and any Codicils) is the true last Will and Testament of the deceased
  • confirmation that they are the only named executors or, where there are other named executors, confirmation as to whether the other named executors have accepted the role of executor and, if not, an explanation as to why this is the case
• in cases where there is a valid Will, but no named executor is administering the estate, a signed declaration from the persons intending to administer the estate, who considers themselves to be the prospective personal representatives, stating the following:
  • confirmation that they believe the enclosed certified copy of the Will (and any Codicils) is the true last Will and Testament of the deceased
  • confirmation as to why all named executors have not accepted the role of executor
  • confirmation of their intention to administer the estate
  • confirmation as to whether any other persons intend to administer the estate
  • an explanation of why those intending to administer the estate consider themselves entitled to do so (and therefore consider themselves to be prospective personal representatives)
• in intestacy cases, a signed declaration from the persons intending to administer the estate, who considers themselves to be the prospective personal representatives, stating the following:
  • confirmation that they believe the deceased died intestate
  • confirmation of their intention to administer the estate
  • confirmation as to whether any other persons intend to administer the estate
  • an explanation of why those intending to administer the estate consider themselves entitled to do so (and therefore consider themselves to be prospective personal representatives)
• the deceased’s National Insurance number (if known)
• any previous names, such as a maiden name (if applicable and if known)

Where multiple persons are administering the estate, pension scheme administrators may wish to consider whether it is appropriate to correspond with one lead person only. This will depend on the circumstances of the case and pension scheme administrators will still need to fulfil the requirements set out in the regulations. If necessary, pension scheme administrators should seek independent legal advice when designing their process.

The pension scheme administrator may request such information and documentation as they reasonably require to evidence a person’s identity and to satisfy themselves that a person has authority to act on behalf of the estate. Once such reasonable information and documentation have been provided to the pension scheme administrator, any applicable response period set out in the regulations will begin.

Where the person administering the estate changes, further checks in respect of the new person’s identity and authority to act will apply.

Background information

In England and Wales, the Non-Contentious Probate Rules 1987 provide the order of priority for obtaining a Grant of Representation. Rule 20 applies where the deceased left a valid Will and Rule 22 of the Non-Contentious Probate Rules 1987 applies in intestacy cases. Under these rules, those entitled to become a personal representative will often be a beneficiary under the Will, or in intestacy cases, the spouse, civil partner, or relative of the deceased.

In Scotland and Northern Ireland, both jurisdictions operate established systems that determine who is entitled, or likely to become entitled, to act as the deceased’s personal representative.

In Scotland, the person who deals with the estate is called an executor-nominate where named in a Will, or an executor-dative where appointed by the court under an established order of priority. For the avoidance of doubt, in this guidance, any reference to ‘executor’ means an executor named in a Will.

In Northern Ireland, entitlement to apply for a Grant of Representation follows a statutory and procedural order of priority that broadly mirrors the position in England and Wales.

Additional information

Once an individual has supplied reasonable evidence that they are a personal representative, or prospective personal representative, and that evidence has been accepted by the pension scheme administrator, this should be taken as satisfying the requirement for that individual at all stages (subject to the pension scheme administrator becoming aware of any relevant changes). However, if a prospective personal representative states that they have become a personal representative, before a payment notice is accepted the individual will need to satisfy the pension scheme administrator this is the case.

We expect that pension scheme administrators will have their own requirements on acceptable forms of identification already in place and we do not see the need to further prescribe these.

Where more than one person submits a request for information, a pension scheme administrator is required to respond to each request if reasonably satisfied that those who submitted the requests meet the identification and authority to act requirements set out above. Pension scheme administrators should seek their own legal advice in respect of any cases where the position is unclear.

Annex B: Draft withholding notice

HMRC will publish the final version of this notice in due course on GOV.UK.

It is the responsibility of the pension scheme administrator to verify whether a notice is valid. HMRC cannot advise on whether individual notices are valid.

Withholding notice — template

This document provides a standard template for withholding notices under section 226A of the Inheritance Tax Act 1984. It provides the requirements prescribed by HMRC as to form and content.

A personal representative is defined under section 272 of the Inheritance Tax Act 1984. For the purposes of this notice, a personal representative is likely to have been named as executor in the deceased’s Will.

A prospective personal representative is a person who has reason to believe that they will become a personal representative, as defined in section 226A(12) of the Inheritance Tax Act 1984.

For a withholding notice to be valid, it must be submitted by a personal representative, prospective personal representative, or person acting on their behalf, who has already been verified by the pension scheme, or who provides acceptable identification documents with this notice.

The draft guidance to support pension scheme administrators in establishing that an individual has the right to act is included at Annex A (draft guidance on personal representative identity)

Please refer to the withholding notice notes when completing this notice.

When to use this form

The withholding notice allows a personal representative or a prospective personal representative, or person acting on their behalf, of a deceased member to require a pension scheme administrator to withhold 50% of pension death benefit entitlement payable to a person for up to 15 months after the end of the month in which the member died. The benefit entitlement constitutes so much of the value of notional pension property under the scheme that it is reasonable to attribute to the benefits that have been paid, or are, or will be payable to that person. This should only be used where personal representatives, prospective personal representatives or persons acting on their behalf know or have reason to believe that Inheritance Tax may be due. This notice is provided for by section 226A of Inheritance Tax Act 1984. Excluded benefits and benefits payable to exempt beneficiaries cannot be withheld.

What this form does not do

The form does not allow a personal representative or persons acting on their behalf to direct a pension scheme to pay an amount of Inheritance Tax directly to HMRC. A separate form is provided for a payment notice. A draft template for the payment notice is included in Annex C. Only personal representatives, persons acting on their behalf, or pension beneficiaries can issue a payment notice. Prospective personal representatives cannot issue a payment notice.

When to withdraw a withholding notice

A withholding notice ceases to have effect when it is withdrawn by a personal representative, prospective personal representative, or person acting on their behalf, or the relevant Inheritance tax (and interest) is paid, or 15 months after the end of the month in which the individual died, whichever occurs first.

A personal representative, prospective personal representative, or person acting on their behalf, should contact the pension scheme administrator to withdraw the notice as soon as the Inheritance Tax is paid or it emerges that no tax is due. If a prospective personal representative issues a withholding notice but does not later obtain a Grant of Representation, they should contact the pension scheme administrator to withdraw the notice. However, once a Grant has been obtained, the personal representative named in the Grant or person acting on their behalf can withdraw the notice, even if they did not submit the original notice.

Withholding notice template

Section 1: About the deceased

1. Deceased’s name - Title - Surname - First names – And if applicable, and if known, any  previous names, such as a maiden name
2. Deceased’s date of birth
3. Deceased’s date of death
4. Inheritance tax reference number, if known
5. National insurance number, if known
6. Name of any surviving spouse or civil partner, if known - Title - Surname - First names
7. Confirmation of whether any surviving spouse or civil partner is an exempt beneficiary, as defined in the Inheritance Tax Act 1984, if known

Section 2: About the personal representative or prospective personal representative, if applicable

(This section must be completed if the person submitting the notice is a personal representative or prospective personal representative. It should not be completed if the notice is being submitted by a person acting on their behalf).

1. In what capacity are you acting when giving this notice? As a personal representative of the deceased’s estate, or as a prospective personal representative of the deceased’s estate
2. Personal representative or prospective personal representative name - Title - Surname - First names
3. Personal representative or prospective personal representative address
4. Personal representative or prospective personal representative telephone number
5. Personal representative or prospective personal representative email address

If there are multiple personal representatives who must act jointly, please provide the details in 1-5 for each.

Section 3: About the person acting on behalf of the personal representative or prospective personal representative, if applicable

This section must be completed if the person submitting the notice is acting on behalf of the personal representatives or prospective personal representative.

Details of the person or firm acting on behalf of the personal representative or prospective personal representative:

1. Name
2. Capacity (for example, solicitor or tax advisor)
3. Contact details of the person or firm acting on behalf of the personal representatives or prospective personal representative: - Address - Telephone number - Email address

Section 4: About the pension scheme

1. Name of the pension scheme to which this notice is being sent
2. Address of the pension scheme to which this notice is being sent
3. Pension Scheme Tax Reference (PSTR) if known
4. Member reference number allocated by the scheme administrator, if any and if known

Section 5: Withholding instruction

I/We instruct the pension scheme administrator not to make a payment under the scheme where that payment would cause the total benefits paid to a person following the deceased member’s death to exceed 50% of that person’s benefit entitlement under the scheme as at the date of death.

I/We understand that:

• Withholding cannot exceed 50% of a person’s benefit entitlement under the scheme as at the date of death
• Payments of excluded benefits and payments to exempt beneficiaries will not be withheld
• Payments already made cannot be reversed
• where a non-exempt beneficiary has already received payments of benefits, that are not excluded, exceeding 50% of their entitlement as at the date of death, no further payments of benefits, that are not excluded, may be made to that beneficiary while the withholding notice remains in effect

Section 6: Declaration

I/We declare that:

• I am/We are a personal representative of the deceased’s estate and have provided the information required for the pension scheme administrator to verify my/our identity and status, or
• I am/We are a prospective personal representative of the deceased’s estate and have provided the information required for the pension scheme administrator to verify my identity and status, or
• I am/We are a person or firm acting on behalf of the personal representatives or prospective personal representative and have provided evidence of my appointment, together with the information required for the pension scheme administrator to verify the identity and status of the personal representatives or prospective personal representative
• I/We know, or have reason to believe, that Inheritance Tax is or may be due in respect of the deceased’s estate and the notional pension property held in this scheme
• I/We understand that a withholding notice may temporarily prevent some pension beneficiaries from receiving the full amount of benefits to which they would otherwise be entitled
• I/We understand that a withholding notice may remain in effect for up to 15 months after the end of the month in which the member died
• If the Inheritance Tax due on the notional pension property is paid in full, or it becomes clear that no Inheritance Tax is due, I/we will notify the pension scheme administrator without delay and withdraw the notice
• I/We declare that the information provided in this notice is true and complete, to the best of my/our knowledge and belief
• I/We understand that, if the notice is accepted as valid, affected beneficiaries will be informed of the notice and my/our names, addresses and contact details will be disclosed to them

Signature:

Name:

Date:

If multiple personal representatives, or prospective personal representatives, are submitting this withholding notice, they must all sign and date the notice.

Withholding notice notes

1. Pension scheme administrators should provide guidance for personal representatives, prospective personal representatives, or persons acting on their behalf who wish to submit a withholding notice. The guidance should explain the required content of a notice and how it must be submitted.
2. Unless a requirement is qualified by the words ‘if known’, it must be provided and a notice is not valid if it is omitted. Where a requirement is qualified by the words ‘if known,’ the information is not required for a notice to be valid but, where available, may help the pension scheme administrator process the notice more quickly.
3. Where a requirement is qualified by the words ‘if applicable’, it must be provided if it applies to the notice. A notice may be invalid if applicable information is omitted. Where the requirement does not apply, the field may be left blank.
4. Pension schemes may adapt the content and format of this notice to fit their own procedures. If pension schemes would like to request additional information, it should be made clear that this is not required for the notices to be legally valid.

Section 1

1. A pension scheme administrator can rely on a statement from the personal representative or prospective personal representative regarding whether the surviving spouse or civil partner are long-term UK residents. The pension scheme administrator may pay benefits to the spouse or civil partner without delay if it is confirmed they are an exempt beneficiary. If the personal representative can confirm the status of the surviving spouse or civil partner they should let the pension scheme administrator know by completing the question in section 1.
2. Pension scheme administrators may wish to collect additional information to ensure that withholding is applied to the correct member’s pension. For example, scheme-specific reference numbers. However, this information is not required for the notice to be valid.

Section 2

1. The details in section 2 should match the evidence obtained to verify the personal representative or prospective personal representative. Depending on when the notice is received, this evidence may already have been provided or may accompany the notice.
2. If the notice is accepted as valid, the details of the personal representative or potential personal representative will be shared with beneficiaries once they have been identified in accordance with scheme rules. For discretionary schemes, this will be once the discretionary process has concluded and beneficiaries have been identified. For non-discretionary schemes, this will be once a beneficiary has been identified under the scheme rules.

Section 3

1. This section must be completed where the notice is submitted by a person or firm acting on behalf of the personal representative or prospective personal representative. The authority to act must be provided with the notice, or have already been submitted. This will include details of the personal representatives or prospective personal representative who appointed them.

Section 4

1. Pension scheme administrators should exercise reasonable judgement when considering the information contained in this section. A notice should not be treated as invalid where minor mistakes are made in this section, but all other information is correct. For example, the name of the pension scheme is not an exact match, but it is nevertheless clear which pension scheme the notice refers to.

Section 5

1. Pension scheme administrators may adapt wording in this section where appropriate. However, any alternative wording should provide substantially the same level of certainty and legal effect.
2. Excluded benefits are not included in notional pension property. However, they are listed here explicitly for clarity and to avoid misunderstanding.
3. Benefit entitlement means the value of the deceased’s notional pension property held in the pension scheme from which benefits will be paid. Excluded benefits and, for the purposes of a withholding notice, benefits payable to beneficiaries who are exempt from Inheritance Tax are not included.

Section 6

1. A separate declaration and signature is required from each personal representative where they are required to act jointly, or from the person acting on behalf of the personal representatives or prospective personal representative.
2. The declaration must be completed and signed by the person submitting the withholding notice.
3. The declaration should be signed and dated in accordance with the pension schemes administrator’s existing policies and procedures. There is no legal requirement for a wet signature, and it is reasonable to accept an electronic signature.

Annex C: Draft payment notice

HMRC will publish the final version of this notice in due course on GOV.UK.

It is the responsibility of the pension scheme administrator to verify whether a notice is valid. HMRC cannot advise on whether individual notices are valid.

Payment notice – template

This document provides a standard template for payment notices under section 226B of the Inheritance Tax Act 1984. It provides the requirements prescribed by HMRC as to form and content.

A personal representative is defined under section 272 of the Inheritance Tax Act 1984. For the purposes of this notice, a personal representative is likely to have been named as executor in the deceased’s Will.

A prospective personal representative is a person who has reason to believe that they will become a personal representative, as defined in section 226B(12) of the Inheritance Tax Act 1984.

Only personal representatives, a person or firm acting on their behalf, and pension beneficiaries, can issue a payment notice to the pension scheme administrator. Prospective personal representatives cannot issue a payment notice. Pension beneficiaries can only issue a payment notice in respect of their own Inheritance Tax liability and only from benefits payable to them from that pension scheme.

For a payment notice to be valid, it must be submitted by a personal representative, or person or firm acting on their behalf, or a pension beneficiary, who has already been verified by the pension scheme, or who provides acceptable identification documents with this notice.

The draft guidance to support pension scheme administrators in establishing that an individual has the right to act is included at Annex A (draft guidance on personal representative identity).

Please refer to the payment notice notes when completing this notice.

When to use this form

The payment notice requires a pension scheme administrator to pay an amount of Inheritance Tax, including interest, directly to HMRC. The payment must relate to Inheritance Tax, and interest, attributable to the deceased member’s notional pension property and be made from the benefits payable under that scheme. Payment notices are provided for by section 226B of the Inheritance Tax Act 1984.

What this form does not do

Payment notices do not allow a personal representative, or a person or firm acting on their behalf, to direct a pension scheme administrator to withhold payment of 50% of pension death benefit entitlement payable to a person for up to 15 months after the end of the month in which the member died. A separate form is provided for a withholding notice. A draft template for the withholding notice is included in Annex B.

Payment notice template

Section 1: About the deceased

1. Deceased’s name - Title - Surname - First names – And if applicable, and if known, any previous names, such as a maiden name
2. Deceased’s date of birth
3. Deceased’s date of death (evidenced for example by the death certificate)
4. Inheritance tax reference number
5. National insurance number, if known

Section 2: About the taxpayer giving the notice

For the purposes of this notice, ‘taxpayer’ means the person giving this notice.

1. In what capacity are you giving this notice? As a personal representative of the deceased’s estate, or as a beneficiary.
2. Taxpayer’s name - Title - Surname - First names
3. Taxpayer’s address
4. Taxpayer’s telephone number, if known
5. Taxpayer’s email address, if known

If there are multiple personal representatives who must act jointly, please provide the details in 1-5 for each.

Section 3: About the personal representative, if known (complete this section if the notice is provided by a beneficiary)

1. Personal representative’s name - Title - Surname - First names
2. Personal representative’s address
3. Personal representative’s telephone number
4. Personal representative’s email address

If there are multiple personal representatives, please provide the information requested in 1-4 for each, where known.

Section 4: About the person or firm acting on behalf of the personal representative, if applicable (for example, solicitor or tax advisor)

Details of the person or firm acting on behalf of the personal representative:

1. Name
2. Capacity (for example, solicitor or tax advisor)
3. Address
4. Telephone
5. Email address

Section 5: About the pension scheme

1. Name of the pension scheme to which this notice is being sent
2. Address of the pension scheme to which this notice is being sent
3. Pension Scheme Tax Reference (PSTR), if known
4. Member reference number allocated by the scheme administrator, if any and where known

Section 6: Amount to be paid

Amount requested to be paid:

1. Inheritance Tax (£):
2. Interest (£):
3. Total amount requested (£):

The personal representative should provide the following detail for each beneficiary, if known: Full name, their share of the Inheritance Tax identified at 1 above and their share interest identified at 2 above.

Section 7: Declaration:

I declare that:

• I am/We are a personal representative of the deceased’s estate and have provided the information required for the pension scheme administrator to verify my identity and status
• I am/We are a person acting on behalf of the personal representative and have provided evidence of my appointment, together with the information required for the pension scheme administrator to verify the identity and status of the personal representative
• I am/We are a beneficiary of the deceased’s pension scheme
• The information provided in this notice is true and complete, to the best of my knowledge and belief
• Sufficient funds remain in the pension scheme to enable the payment specified in this notice to be made to HMRC
• I understand that the pension scheme administrator will not make a payment to HMRC if this notice is invalid
• I understand that I cannot withdraw this notice once the payment of Inheritance Tax has been processed or can no longer be stopped by the pension scheme administrator
• I understand that any repayment of overpaid Inheritance Tax will be made through HMRC’s usual repayment processes and not through the pension scheme
• I understand that payments of Inheritance Tax made directly to HMRC will not be subject to income tax, but any repayments from HMRC may be subject to income tax

Only complete this section if you are giving this payment notice as a beneficiary

• I understand that, if this notice is accepted as valid, the pension scheme administrator will reduce the benefits payable to me to meet the Inheritance Tax liability
• I understand that, if this notice is accepted as valid, the pension scheme administrator will provide the personal representative with my name and address, and the amount of Inheritance Tax and interest paid to HMRC on my behalf

Only complete this section if you are giving this payment notice as a personal representative

• I understand that, if this notice is accepted as valid, the pension scheme administrator will reduce the benefits payable to non-exempt beneficiaries in order to pay the Inheritance Tax due to HMRC
• I understand that, if this notice is accepted as valid, the pension scheme administrator will provide any beneficiary whose benefits are reduced as a result of this notice with my name and address, and the amount of Inheritance Tax and interest paid to HMRC

Signature:

Name:

Date:

If multiple personal representatives are submitting this payment notice, they must all sign and date the notice.

Payment notice notes

1. Pension schemes should provide guidance for taxpayers or persons acting on their behalf who wish to submit a payment notice. The guidance should explain the required content of a notice and how it should be submitted.
2. Parts of this notice must only be completed if the taxpayer is a beneficiary and other parts where the taxpayer is a personal representative. A payment notice is only valid if the correct parts of the notice have been completed for the type of taxpayer who is submitting the notice, or on whose behalf it is being submitted.
3. Unless a requirement is qualified by the words ‘if known’, it must be provided and a notice is not valid if it is omitted. Where a requirement is qualified by the words ‘if known,’ the information is not required for the notice to be valid but, where available, may help the pension scheme administrator process the notice more quickly.
4. Where a requirement is qualified by the words ‘if applicable’, it must be provided if it applies to the notice. A notice may be invalid if applicable information is omitted. Where the requirement does not apply, the field may be left blank.
5. Pension schemes may adapt the content and format of this notice to fit their own procedures. If pension schemes would like to request additional information, it should be made clear that this is not required for the notices to be legally valid.

Section 1

1. The Inheritance Tax reference number is essential because, without it, HMRC may be unable to allocate the payment to the correct account. If the taxpayer does not know or provide this, the notice must be treated as invalid.

Section 2

1. The Inheritance Tax Act 1984 allows either the personal representative or a beneficiary to give a payment notice to the pension scheme administrator. Both are taxpayers for these purposes, although different information and declarations are required depending on the capacity in which the notice is given.
2. A personal representative, who is also a beneficiary, using this form to request payment of Inheritance Tax due on their own pension benefit, must complete the form as a beneficiary. It is important to capture the correct role in which they are requesting payment.

Section 3

1. This information must be provided where the taxpayer is giving the notice as a beneficiary. It may be left blank where the notice is given by a personal representative, or person acting on behalf of a personal representative.

Section 4

1. This information should be provided only where the notice is submitted by a person acting on behalf of a personal representative. In all other cases, it may be left blank.

Section 5

1. Pension scheme administrators should exercise reasonable judgement when considering the information provided in this section. A notice should not be treated as invalid solely because of a minor error in the pension scheme details, provided it is clear which pension scheme the notice relates to.

Section 6

1. The total amount requested must be at least £1,000.
2. The notice must specify separately the amount of Inheritance Tax and the amount of interest that the taxpayer wants the pension scheme administrator to pay. This ensures that any interest paid is allocated correctly and is not used to reduce another taxpayer’s Inheritance Tax liability.
3. The total amount specified must not exceed the taxpayer’s liability for Inheritance Tax and interest. Pension scheme administrators may reasonably request a copy of the taxpayer’s HMRC Inheritance Tax calculation when verifying this amount. Where no HMRC calculation is available, for example, the taxpayer wants to pay an amount of Inheritance Tax in advance of a specific calculation to reduce the interest charge, the amount requested should be reasonable. For example, the amount of tax requested (excluding interest) should not exceed 40% of the notional pension property in a notice given by a personal representative, or 40% of the beneficiary’s share of the notional pension property in a notice from beneficiary.
4. The total amount specified must not exceed the amount of in-scope benefits remaining in the scheme. Benefits held in an unsecured arrangement are not treated as having been paid for these purposes. However, where benefits have been used to provide a secured pension benefit, they are treated as having been paid and are therefore outside the scope of any subsequently issued payment notice. For a beneficiary notice, the total amount (tax plus interest) must not be more than the unpaid pension benefits remaining for that beneficiary (that is, any amount still unpaid less any amount already specified in an earlier notice). If the taxpayer is a personal representative, the total amount must not exceed the amount still unpaid and not specified in an earlier notice and shouldn’t include excluded benefits or benefits payable to exempt beneficiaries.
5. Where beneficiaries have been identified, a personal representative should provide details of the amount of Inheritance Tax and interest to be paid from their benefits. Personal representatives may request this information from the pension scheme administrator and will need it to complete the relevant Inheritance Tax account.

Section 7

1. If the taxpayer asks to withdraw a payment notice before the payment has been made to HMRC, or while the payment can still be stopped, the pension scheme administrator must allow the notice to be withdrawn. If the payment has already been made, or can no longer be stopped, HMRC will not return the funds to the pension scheme administrator. In those circumstances, the pension scheme administrator should advise the taxpayer to contact HMRC promptly.
2. The declaration should be signed and dated in accordance with the pension scheme administrator’s existing policies and procedures. There is no legal requirement for a wet signature, and it is reasonable to accept an electronic signature.