Chancellor ‘failed to listen’ on pension pot tax, say Lords

28 Jan 2026

Lords call for extension to six-month deadline for inheritance tax on unused pension pots saying plan caused ‘avoidable anxiety and costs’ due to ‘lack of proper consultation’

The government has been heavily criticised in a report by members of the House of Lords Finance Bill sub-committee following three months of hearings on inheritance tax (IHT) and the treatment of pension pots, along with reforms to business property reliefs (BPR).

One of the biggest concerns raised during the hearings was the strict six-month deadline placed on the personal representatives (PRs) – executors, agents and local law firms - to pay the IHT bill on the outstanding pension pots.

The Lords report said it was ‘not realistic to expect PRs to be able to meet the statutory six-month deadline for payment of IHT’, and that ‘it cannot be right to impose on taxpayers a timescale for payment - if that timescale is for many likely impossible to meet’.

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