Legal News | 12.02.26

Probate and pensions – key updates for personal representatives

At Autumn Budget 2024, the Government announced that inheritance tax (IHT) would apply to most unused pension funds from April 2027. The Government had originally suggested that pension scheme administrators (PSAs) would be responsible for reporting and paying the IHT on these pensions. However, after feedback to a technical consultation which closed in early 2025, the Government changed its position and announced that it would instead be the deceased’s personal representatives (PRs) who would face this considerable task.

To help alleviate some of the burden placed on PRs, the Government announced at the Autumn Budget 2025 that, first, PRs would be given the ability to require PSAs to pay IHT on pension assets using funds held within the scheme. Second, PRs would also be discharged from liability for payment of IHT on pensions discovered after they had received clearance from HMRC. Despite these proposals, significant issues surround the workability of the Government’s plans and, on 28 January 2026, the House of Lords Economic Affairs Committee made several recommendations. Their report recommends that the Government:

(i) extends the IHT payment deadline for unused pension pots from 6 to 12 months (on a temporary basis);

(ii) introduces protection from late interest payments for PRs who are not at fault for missing deadlines;

(iii) gives PRs longer to value pension assets than the current four-week window, particularly given the complexity of some assets held within pension schemes; and

(iv) introduces a new ‘Pensions Dashboard’ well in advance of April 2027 so that PRs of an estate can have full visibility of the deceased’s pensions at the time of death.

The changes have been backed by several professional bodies, including the Association of Taxation Technicians (ATT). We wait to see whether they will be taken on board by the Government prior to April 2027. If you require advice in advance of the changes, speak to the Private Client team at Wansbroughs at wealth@wansbroughs.com.