Policy paper

Reforming Inheritance Tax — unused pension funds and death benefits

This measure will bring unused pension funds and death benefits into scope of Inheritance Tax from 6 April 2027.

• From: HM Revenue & Customs
• Published: 21 July 2025

Documents

Inheritance Tax on unused pension funds and death benefits

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Draft legislation

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Draft legislation (accessible version)

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Explanatory note

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Details

As announced at Autumn Budget 2024, the government will bring most unused pension funds and death benefits into scope of Inheritance Tax from 6 April 2027.

From this date, personal representatives will be liable to report and pay any Inheritance Tax due on unused pension funds or death benefits. All death in service benefits payable from a registered pension scheme will be excluded from the value of an individual’s estate for Inheritance Tax purposes from 6 April 2027.

Published 21 July 2025