Results of Government consultation re IHT on pension pots today

Sea_Shell

Does spending our savings/pensions push up inflation?
 

GunJack

Sea_Shell said:

Does spending our savings/pensions push up inflation?
 

It may, depending on what you spend it on, however you'll need to spend more to keep up with inflation 🤣🤣

Albermarle

Sea_Shell said:

Does spending our savings/pensions push up inflation?
 

I would not have thought the impact would be high enough.
The Gov link supplied mentions some figures, but in the great scheme of things it is relatively small beer.
Being on a Pensions forum, can mean the impact on the number of people affected seems larger than it really is.

MeteredOut

dunstonh said:

Lots of widows and widowers remarrying.   The new definition of attractive to partner is an unused deceased spouse's IHT allowance.

How long before a niche dating app appears? 

As you do, I asked ChatGPT for some ideas

🔟 Top 10 Dating App Name Ideas

1. HeirMatch – A clean, clever blend of inheritance and matchmaking. Memorable and clear.

2. Legacy Link – Subtle and dignified, suggests connection and future planning.

3. GoldenMatch – Warm and aspirational, speaks to later-life romance and value.

4. HomeHearts – Soft and appealing; nods to both property and emotion.

5. Allowance Amour – A witty combination of tax language and love.

6. Hearts & Heirs – Balanced and charming, plays on both emotional and legal terms.

7. Will You? – Clever double meaning (wills + proposal), short and punchy.

8. EstateMate – Fun rhyme that blends companionship with estate planning.

9. RNRB Romance – For a more financially literate audience; niche but witty.

10. LaterLove – Warm, direct, and age-appropriate without being patronising.

I think EstateMate is actually a pretty good name!

Albermarle

MeteredOut said:

dunstonh said:

Lots of widows and widowers remarrying.   The new definition of attractive to partner is an unused deceased spouse's IHT allowance.

How belong before a niche dating app appears? 

As you do, I asked ChatGPT for some ideas

🔟 Top 10 Dating App Name Ideas

1. HeirMatch – A clean, clever blend of inheritance and matchmaking. Memorable and clear.

2. Legacy Link – Subtle and dignified, suggests connection and future planning.

3. GoldenMatch – Warm and aspirational, speaks to later-life romance and value.

4. HomeHearts – Soft and appealing; nods to both property and emotion.

5. Allowance Amour – A witty combination of tax language and love.

6. Hearts & Heirs – Balanced and charming, plays on both emotional and legal terms.

7. Will You? – Clever double meaning (wills + proposal), short and punchy.

8. EstateMate – Fun rhyme that blends companionship with estate planning.

9. RNRB Romance – For a more financially literate audience; niche but witty.

10. LaterLove – Warm, direct, and age-appropriate without being patronising.

I think EstateMate is actually a pretty good name!

How about ' Nil Rate Band hook ups' ?

af1963

MeteredOut said:

dunstonh said:

Lots of widows and widowers remarrying.   The new definition of attractive to partner is an unused deceased spouse's IHT allowance.

How long before a niche dating app appears? 

As you do, I asked ChatGPT for some ideas

🔟 Top 10 Dating App Name Ideas

1. HeirMatch – A clean, clever blend of inheritance and matchmaking. Memorable and clear.

2. Legacy Link – Subtle and dignified, suggests connection and future planning.

3. GoldenMatch – Warm and aspirational, speaks to later-life romance and value.

4. HomeHearts – Soft and appealing; nods to both property and emotion.

5. Allowance Amour – A witty combination of tax language and love.

6. Hearts & Heirs – Balanced and charming, plays on both emotional and legal terms.

7. Will You? – Clever double meaning (wills + proposal), short and punchy.

8. EstateMate – Fun rhyme that blends companionship with estate planning.

9. RNRB Romance – For a more financially literate audience; niche but witty.

10. LaterLove – Warm, direct, and age-appropriate without being patronising.

I think EstateMate is actually a pretty good name!

NRBindr, perhaps ?

SnowMan

From the 2025 budget documents

https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits

The government published a summary of responses and a formal response to the technical consultation on 21 July 2025. This announced that personal representatives, rather than pension scheme administrators, will be liable for reporting and paying any Inheritance Tax due on unused pension funds and pension death benefits from 6 April 2027. It also confirmed that death in service benefits payable from a registered pension scheme will remain out of scope of Inheritance Tax. At Budget 2025 the government set out further detail on the process to implement these changes.

The government will introduce a mechanism for personal representatives to direct pension scheme administrators to withhold benefits and to pay Inheritance Tax due on unused pension funds or pension death benefits to support them in administering the estate. This will be available in limited circumstances to reduce the impact on pension beneficiaries. Personal representatives will also be discharged from liability for pensions discovered after they have received clearance for settling the Inheritance Tax due on the estate, if HMRC are satisfied that they have made every effort to locate the deceased’s pensions.

SnowMan

See HMRC Pensions Newsletter 175 - November 2025 (published 27 November 2025)

https://www.gov.uk/government/publications/pensions-schemes-newsletter-175-november-2025/newsletter-175-november-2025

Inheritance Tax on pensions

Thank you to those who responded, for your valuable input on the draft legislation published at Legislation Day. 

The government will introduce legislation in Finance Bill 2025-26 to bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax purposes, for deaths on or after 6 April 2027. As part of these changes, personal representatives will be liable for reporting and paying any Inheritance Tax due on unused pension funds and death benefits. 

As announced at Autumn Budget 2025, if personal representatives reasonably expect Inheritance Tax to be due, they can direct pension scheme administrators to withhold 50% of the taxable benefits for up to 15 months from the date of death.  Personal representatives can then direct pension scheme administrators to pay the Inheritance Tax due to HMRC from the benefits that have been withheld before releasing the rest of those benefits to the pension beneficiaries.

The remaining funds can be paid out if either the:

- withholding instruction is withdrawn

- period ends

This will not apply to:

- exempt beneficiaries

- benefits under £1,000

- continuing annuities

Personal representatives will also be discharged from liability for any pensions which are discovered after they have received clearance from HMRC.

The Finance Bill will be published shortly and will include updated legislation reflecting the changes outlined above and further amendments arising from responses to the consultation. We will contact the Inheritance Tax on pensions working group shortly to discuss the detail of these changes. Comprehensive guidance will be made available in due course.

The tax information and impact note for this measure, Inheritance Tax — unused pension funds and death benefits, provides more information.

Albermarle

SnowMan said:

See HMRC Pensions Newsletter 175 - November 2025 (published 27 November 2025)

https://www.gov.uk/government/publications/pensions-schemes-newsletter-175-november-2025/newsletter-175-november-2025

Inheritance Tax on pensions

Thank you to those who responded, for your valuable input on the draft legislation published at Legislation Day. 

The government will introduce legislation in Finance Bill 2025-26 to bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax purposes, for deaths on or after 6 April 2027. As part of these changes, personal representatives will be liable for reporting and paying any Inheritance Tax due on unused pension funds and death benefits. 

As announced at Autumn Budget 2025, if personal representatives reasonably expect Inheritance Tax to be due, they can direct pension scheme administrators to withhold 50% of the taxable benefits for up to 15 months from the date of death.  Personal representatives can then direct pension scheme administrators to pay the Inheritance Tax due to HMRC from the benefits that have been withheld before releasing the rest of those benefits to the pension beneficiaries.

The remaining funds can be paid out if either the:

- withholding instruction is withdrawn

- period ends

This will not apply to:

- exempt beneficiaries

- benefits under £1,000

- continuing annuities

Personal representatives will also be discharged from liability for any pensions which are discovered after they have received clearance from HMRC.

The Finance Bill will be published shortly and will include updated legislation reflecting the changes outlined above and further amendments arising from responses to the consultation. We will contact the Inheritance Tax on pensions working group shortly to discuss the detail of these changes. Comprehensive guidance will be made available in due course.

The tax information and impact note for this measure, Inheritance Tax — unused pension funds and death benefits, provides more information.

Do you know if it will still be the case ( as I think was mentioned in previous updates)  that the executor can decide where any IHT bill can be paid from?
So they could pay it all from the pension, or all from the rest of the estate, or any mix of the two?
Or will there be some proportionately, so if the pension is a third of the estate, a third of the tax bill has to come from there.

af1963

The original paper suggested the total IHT allowance would be shared in proportion to the value of the taxable portions (excluding spouse, charities etc) of the pensions and the will, and each source would then cover its own tax.  Not sure if that has changed in the consultation process. 

Notifying the pension provider to retain part of the benefits until the tax liability is settled, while paying out an initial instalment, seems like it would avoid the potential issues with long delays before pension benefits could be released, or with recipients getting a tax bill after receiving their inherited pension.