Pensions: Inheritance Tax
The question
To ask the Chancellor of the Exchequer, whether she plans to provide support to people affected by the inclusion of unused pension funds in Inheritance Tax calculations from April 2027.
Answered by James Murray
As announced at Autumn Budget 2024, from 6 April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for inheritance tax purposes.
Estates will benefit from the normal nil-rate bands, reliefs, and exemptions available. For example, the nil-rate bands mean an estate can pass on up to £1 million with no inheritance tax liability, and the general rules mean any transfers to a spouse or civil partner are fully exempt from inheritance tax.
Comprehensive guidance will be published in the normal way ahead of the changes coming into effect, which will support individuals in understanding the rules.
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