Inheritance tax risks and pension pot calculations

Bringing pension pots into inheritance tax (IHT) calculations will create complexity and compliance risks for personal representatives handling estates, warns AJ Bell

It’s now less than nine months until unused pensions will be included in calculations for inheritance tax (IHT) from the new tax year, resulting in a raft of complex rules for compliance and no flexibility on deadlines for payment of tax to HMRC. Despite intense lobbying of the government and HMRC the final rules are not straightforward and will create real pressure points for personal representatives and the loved ones of the deceased.

From 6 April 2027, unused pensions will be included in calculations for IHT, which will not be straightforward to handle.

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