Overview

• The reform will include unspent defined‑contribution pension funds in a person’s estate for inheritance tax from April 6, 2027.
• Government figures indicate about 10,500 additional estates will face IHT and roughly £1.46 billion a year could be raised by 2029/30, while industry estimates suggest average bills may rise by around £34,000.
• Beneficiaries may face a combined hit of inheritance tax and income tax on withdrawals, with reported effective rates up to 67% for additional‑rate taxpayers.
• From 2027 personal representatives will be responsible for reporting and paying any IHT due on pension pots, and death‑in‑service benefits remain outside the IHT scope.
• Petitions opposing the change have gathered thousands of signatures, and advisers report widespread client planning changes since the Autumn Budget announcement.