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Current position

The current position is set out in the Inheritance tax treatment of pensions on death (before 6 April 2027) and IHT relief for pensions guidance notes. Broadly, death benefits and unused pension funds from discretionary schemes are not chargeable to inheritance tax. Death benefits from non-discretionary schemes are chargeable to IHT and this is due by the personal representatives.

However, HMRC has noted that since the changes to pension taxation over the last decade, pension schemes have been increasingly used and marketed as a tax planning tool to transfer wealth without an IHT charge, rather than for