Pensions and Estate Planning Tax
Written and reviewed by the Pension Tax Accountants editorial team. Last reviewed 29 July 2026.
The rules on pensions and inheritance tax are changing. From 6 April 2027 most unused pension funds and death benefits fall into a person's estate for inheritance tax, which reverses the position many people planned around. We handle the pension tax side of that change and coordinate with your wider tax affairs.
This service sits alongside the pensions and inheritance tax guide, which explains the change. Here we do the work: understanding how a specific pension will be treated, and making sure the tax reporting is right when the time comes.
We deal with the pension tax side only. General estate inheritance tax, the nil rate band, business property relief and the estate return itself belong with a specialist inheritance tax adviser, and we coordinate with that adviser rather than duplicate their work. We do not advise on transfers, drawdown or what you should do with the pension, which are FCA-regulated matters.
What the Estate Planning Tax Work Covers
We look at how an unused pension fund is expected to be treated for inheritance tax from 6 April 2027, how it interacts with the pension tax already due on the fund, and what the personal representatives will need to report and pay. The private pension tax framework is set out by HMRC under tax on your private pension, and we apply it to your position.
Death in service benefits are excluded from the change, so part of the work is separating what falls into the estate from what does not, and making sure the distinction is documented for whoever administers the estate.
Where the April 2027 Change Bites
The change is enacted, having been brought in by the Finance Act 2026 and taking effect for deaths from 6 April 2027, but the reporting rules are still being finalised. We track the detail as it lands, and until it is settled we plan on the basis of the confirmed law and flag anything still open.
The practical sting is that personal representatives will have to report and pay in respect of the pension, which adds a step and a cost to administering an estate. We prepare for that now rather than leave it to a stressed executor later.
How We Coordinate with the Estate
We work with your inheritance tax adviser and, in due course, your personal representatives, so the pension tax figures feed cleanly into the estate. We keep to the pension side of the line and hand the general estate calculation to the specialist, which avoids duplicated fees and conflicting numbers.
For business owners we join this up with our director pension contributions work, so contributions made now are considered with the April 2027 position in view.
What Estate Planning Tax Work Costs
We work to a fixed fee agreed before we start. Because the reporting rules are still being finalised, we scope the work to what can be done with confidence today and set the fee to match.
Where the final rules change what is needed, we confirm any further fee with you before doing the extra work.