Enter your estate and your pensions to compare the inheritance tax on a death before 6 April 2027 with a death on or after it.
For deaths on or after 6 April 2027, unused pension funds and pension death benefits count as part of your estate for inheritance tax. Before that date, money left in most pensions passes outside the estate. Death in service benefits from a registered pension scheme stay outside it, and anything left to a husband, wife or civil partner stays exempt.
Anything above your bands is taxed at 40%. The nil rate band is £325,000 a person, and the residence nil rate band adds £175,000 a person where a home passes to children or grandchildren. A married couple or civil partners can use two of each where the first to die left everything to the survivor.
The residence nil rate band tapers away at £1 for every £2 of estate above £2,000,000. Above that figure the result assumes the full band. Bands checked on gov.uk on 26 October 2026. The Budget on 28 October 2026 can change them.
Gifts made in the last seven years, business and agricultural relief, trusts and the residence nil rate band taper can all change the bill. If you die at 75 or over, the people who inherit a pension may also pay income tax on it. An adviser works these through for your estate.
This is information. It is not a personal recommendation. Whether any of it is right for you depends on your circumstances. Tax treatment depends on your circumstances and on current rules, which can change. The Financial Conduct Authority does not regulate tax advice.
No. The exemption for a spouse or civil partner covers pension death benefits after 6 April 2027 in the same way as the rest of the estate.
No. Death in service benefits paid from a registered pension scheme are excluded from the change, so leave them out of the pensions figure.
The personal representatives are liable for reporting and paying it. They can direct the pension scheme to pay the tax due to HMRC before it releases the rest of the money to the people who inherit it.
Not for deaths before 6 April 2027. From that date, unused pension money counts as part of your estate.
Read the answer →Your executors are liable. Beneficiaries are jointly liable with them, and there are two ways to settle the bill out of the pension itself.
Read the answer →Work out whether your estate will be over the bands with the pension in it. Nominations, gifts and life cover in trust are among the options.
Read the answer →No. Benefits paid because you died while employed are excluded from the April 2027 pension rules.
Read the answer →What your estate would pay as things stand, and which bands you can use.
Work it out →Enter your pot, the income you want and a growth rate to see the age the pot runs out and the income tax on each year's withdrawal.
Work it out →Enter your pot and any lump sum allowance you have used to see your tax-free cash, and the income tax if you take the whole pot at once.
Work it out →From 6 April 2027 the money left in your pensions when you die counts as part of your estate for inheritance tax.
Your first call is with an Account Manager and is at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.