Newsletter 171 — July 2025
Published 30 July 2025
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This publication is available at https://www.gov.uk/government/publications/pensions-schemes-newsletter-171-july-2025/newsletter-171-july-2025
Reforms to inheritance tax on pensions
We published a technical consultation on 30 October 2024 seeking views on the administrative proposal to make pension scheme administrators responsible for reporting and paying any Inheritance Tax due on pensions to HMRC. We are grateful for the many helpful responses received.
On 21 July 2025 (Legislation Day), the government published its response, Inheritance Tax on pensions: liability, reporting and payment. This sets out that, in response to the consultation, personal representatives, not pension scheme administrators, will be liable for reporting and paying Inheritance Tax on unused pension funds and death benefits. The government has also confirmed that, from 6 April 2027, all death in service benefits payable from registered pension schemes will be out of scope of Inheritance Tax, regardless of whether the pension scheme is discretionary or non-discretionary.
The response document includes the high-level process for typical estates. Draft legislation has been published for technical consultation. The consultation mailbox is open for feedback on the legislation until 15 September 2025 — ihtonpensions@hmrc.gov.uk.
The government will publish further draft legislation in due course on the changes required to the information sharing regulations.
Lifetime allowance protections and enhancements — authenticated look up service
In Pension schemes newsletter 169 we told you that in late 2025, we will be moving the current lifetime allowance protection look up service onto the Managing pension schemes service.
You will no longer be able to access the existing service after the new authenticated look up service goes live.
How to access the new service on Managing pension schemes
To sign into the Managing pension schemes service to check if a member has a protection or enhancement, you will need to be registered as a pension scheme administrator or a pension scheme practitioner. Once you have registered on the Managing pension schemes service you will be able to access the new service at any time.
If you have colleagues who only require access to the authenticated look up service to check a protection or enhancement, that do not need access to any other features as a pension scheme administrator, they should access the Managing pension schemes service as a pension scheme practitioner. As a pension scheme practitioner, users have limited access and as long as they have not been authorised to act on behalf of any pension schemes, they will only be able to view the authenticated look up service.
Find out about the pension scheme practitioner role.
Relief at source
The deadline for submitting your annual return of information and APSS590 declaration for 2024 to 2025 to HMRC has passed. However, there are still returns outstanding from scheme administrators who have submitted interim repayment claims in 2025 to 2026.
If a 2024 to 2025 annual return of information was due for your scheme and is still outstanding, any subsequent interim repayments will be withheld until we receive both the:
- outstanding return
- APSS590 declaration
We want to remind pension scheme administrators that it’s important to use the right naming convention when submitting an annual return of information for 2024 to 2025. Using the wrong references on either the file name or within the annual return itself will mean our systems will reject your submission and you’ll have to resubmit the return.
You can find details of how you should name your files in the:
Managing pension schemes service
Pension scheme administrators and practitioners must now use the Managing pension schemes service to update HMRC and fulfil all their pensions reporting requirements. This includes creating, compiling, and submitting their pension scheme return for the 2024 to 2025 tax year onwards. The pension scheme return can only be submitted through the Managing pension schemes service — pension schemes need to be migrated to receive a notice to file.
If you have not yet migrated your pension schemes to the Managing pension schemes service, you need to do so now. There are two steps to the process, the first is to enrol onto the Managing pension schemes service and then you can migrate your schemes.
There is now a short video giving a step-by-step walkthrough of:
- the process to enrol onto the Managing pension schemes service
- how to migrate your schemes onto the Managing pension schemes service
Migrating to the Managing pension schemes service allows you to see all your schemes in one place and benefit from real-time updates, so that you can immediately see changes, view submitted information and details of payments and charges.
Winding up a scheme
If your pension scheme has wound up, and you have received a notice to file a pension scheme return for the 2024 to 2025 tax year, you will need to submit the pension scheme return before you report the wind up on the Event Report.
If you haven’t already, you will need to migrate your pension scheme on to the Managing pension schemes service to report the wind up on the Event Report.
If you are having issues with migrating a pension scheme, you should email migration.mps@hmrc.gov.uk and put ‘Managing pension schemes — Migrating Pension schemes’ in the subject line.
Pension flexibility statistics
HMRC can now give more information on the number of tax repayment claim forms processed for pension flexibility payments.
From 1 April 2025 to 30 June 2025, we processed:
- P55: 10,008 forms
- P53Z: 2,250 forms
- P50Z: 509 forms
Total value repaid: £48,701,927
The tax repayment figures for the period 1 July 2025 to 30 September 2025 will be published in Pensions schemes newsletter ― October 2025.
Qualifying recognised overseas pension schemes transfer data
The number of transfers in to qualified recognised overseas pension schemes was 4,022 in 2024 to 2025.
The total value of these transfers was £872 million.
| Year | Number of transfers | Total value of transfers |
|---|---|---|
| 2020 to 2021 | 3,000 | £416,000,000 |
| 2021 to 2022 | 3,900 | £517,000,000 |
| 2022 to 2023 | 3,300 | £680,000,000 |
| 2023 to 2024 | 7,100 | £1,140,000,000 |
| 2024 to 2025 | 4,022 | £872,000,000 |
The figures for 2025 to 2026 will be published in July 2026.