Important Update: Inheritance Tax Planning

We want to inform all members and their advisers about significant developments in Inheritance Tax (IHT) planning, following the UK government’s publication of its final response to the recent technical consultation.

What the Government Has Released

The government’s response, released on 22nd July, spans approximately 15,000 words and offers far more detail than the initial announcement. However, it still falls short of providing the full operational guidance needed for effective planning.

Key Changes Since November

Under the original proposal, Pension Scheme Administrators were expected to take on IHT reporting and payment responsibilities. Following widespread industry opposition, this will now remain with Personal Representatives, a major departure from the earlier position.

In addition, all death-in-service benefits from registered pension schemes will be entirely excluded from the IHT regime, regardless of whether the scheme operates on a discretionary basis.

Our Response

We are actively working with our legal and accountancy partners to review the implications of these revised proposals for your pension arrangements.

While the Personal Representative-led model introduces multiple payment options, it also raises operational complexities—particularly around how pension schemes and estate administrators will share essential information.

Next Steps

Once our detailed review is complete, we will publish a comprehensive briefing to guide members through the changes and what they mean for your pension arrangements. Our focus is on providing clarity and ensuring you are well-prepared as the April 2027 implementation date approaches.

We appreciate your patience and will keep you updated as further guidance becomes available. If you have immediate questions, please contact your usual contact.