Executor duties for reporting pensions under the 2027 IHT rules

From 6 April 2027, most unused pension funds and death benefits will count as part of a deceased person's estate for inheritance tax, and it is the personal representatives (the executors named in the will, or administrators where there is no will) who are legally responsible for reporting those pension values to HMRC and making sure any IHT due on them is paid. This is a genuine change of job description. Under the current rules most pension death benefits sit outside the estate and executors can largely leave pensions to the scheme; from April 2027 the pension becomes part of the estate you must find, value, report and settle tax on. This guide applies UK-wide, since inheritance tax is a UK-wide tax.

The good news is that the new duty slots into work executors already do. You already have to identify assets, obtain valuations and complete an IHT account before applying for probate; pensions now join that list. The harder part is timing and funding: IHT generally has to be paid, at least in part, before the grant issues, yet pension money is usually only released after it. This guide walks through the duty step by step, separates what you must do from what happens automatically, and explains the payment mechanisms that bridge the gap, including the scheme's ability to withhold up to 50% of the pension for up to 15 months. If you are administering an estate with pension savings, you can estimate the likely IHT exposure on the pension in about two minutes with our free 2027 estimator before you start gathering figures.

What changes on 6 April 2027

For deaths on or after 6 April 2027, unused pension funds and death benefits from registered pension schemes (and equivalent overseas arrangements) are brought into the estate for inheritance tax. The government's policy paper on IHT and pensions confirms the design settled after consultation: rather than making pension scheme administrators liable, as first proposed, the final rules place responsibility for reporting and paying the IHT on the personal representatives.

Three carve-outs matter for executors:

• Death in service benefits paid from registered pension schemes are excluded from the charge, so a lump sum paid because someone died while employed and in the scheme does not enter the IHT calculation.
• Pensions passing to a spouse or civil partner remain covered by the spouse exemption, so no IHT arises on those funds regardless of size.
• Deaths before 6 April 2027 stay under the current rules. If you are part-way through an estate now, this reform does not change your reporting.

The scale is significant but not universal. HMRC estimates around 10,500 estates a year will become liable for IHT for the first time because of the change, and a further 38,500 will pay more than they otherwise would, with the average increase for those paying more around £34,000. Our pensions and inheritance tax 2027 research page sets out the underlying data. Whether a given estate is affected still depends on the ordinary thresholds: the £325,000 nil-rate band, the £175,000 residence nil-rate band where a home passes to direct descendants, and the combined married couple position of up to £1,000,000. See our guide to the inheritance tax rules for how those fit together.

What you must do versus what happens automatically

Much of the anxiety around this reform comes from blurring two different things. Some steps are legal duties of the personal representatives. Others happen between the pension scheme, the beneficiaries and HMRC without you driving them. Keeping the division clear makes the job manageable.

The executor must	Happens via the scheme or HMRC
Identify every pension the deceased held and notify each scheme of the death	The scheme decides, under its own rules, who receives the death benefits
Request and collect valuations of unused funds and death benefits from each scheme	The scheme provides the valuation figures and beneficiary information you need for the IHT account
Include the pension values in the estate's IHT account and calculate the tax across the whole estate	Where instructed, the scheme can pay IHT attributable to the pension direct to HMRC
Make sure the IHT attributable to the pension is paid, using one of the funding routes below	The scheme can withhold up to 50% of the pension amount for up to 15 months to fund the tax
Keep records and settle the tax position before distributing the estate	HMRC issues calculations, repayments and clearance in the normal way

Notice what is not on your list: you do not choose who gets the pension (that remains the scheme's decision under its rules, usually guided by the deceased's expression of wish form), and you do not administer the pension itself. Your duty is to find it, value it, report it and see the tax settled. How schemes pass information to HMRC and to you is covered in our companion guide to how pension schemes report death benefits to HMRC from 2027.

The information-gathering duty, step by step

1. Build a pension inventory early. Go through paperwork, bank statements (contribution payments out, pension income in), payslips, P60s and email for scheme names. Ask family and former employers. The free government Pension Tracing Service can find contact details for workplace and personal schemes. People change jobs often, so assume there may be pots nobody mentioned.
2. Notify each scheme of the death and tell them you are a personal representative. Send a certified copy of the death certificate and ask, in writing, for the value of any unused funds and death benefits at the date of death, whether any benefit is a death in service benefit, and who the scheme intends to pay.
3. Log dates and chase in writing. Interest on unpaid IHT starts to run six months after the end of the month of death, so slow scheme responses cost the estate money. A dated paper trail also protects you if figures arrive late.
4. Feed the values into the estate's IHT account alongside property, savings and other assets, following HMRC's guidance on valuing the estate of someone who has died. The pension is aggregated with the rest of the estate to work out the total tax.
5. Settle the tax attributable to the pension using one of the funding routes below, then keep evidence of payment with your estate records before distributing.

Exactly what to request from each provider, and in what form, is a topic in its own right; our guide to getting pension information from providers after a death covers the request letters and typical response times. If you are new to the role generally, this pension duty is one stage inside the wider job described in our executor step by step guide, and pension notification belongs in the early admin covered in the first 30 days for executors.

The funding gap, and the 50% withholding mechanism

The structural problem every commentary points at is real: IHT generally has to be paid, at least in part, before the grant of probate issues, but pension funds are normally only released to beneficiaries after the scheme has made its decision, which can itself follow the grant. You are asked to fund tax on money you cannot yet reach. The rules provide several bridges:

• Scheme withholding. A pension scheme can withhold up to 50% of the pension amount for up to 15 months from the date of death, so that the inheritance tax attributable to the pension can be met before the balance is released. This is the mechanism designed specifically for the 2027 change.
• Beneficiary-instructed payment. Beneficiaries can instruct the scheme to pay the IHT attributable to their share direct to HMRC rather than receiving the gross amount and settling up afterwards.
• The Direct Payment Scheme. Banks and building societies holding the deceased's accounts can pay IHT straight to HMRC before probate, under HMRC's guidance on paying inheritance tax.
• Instalments and grant on credit. Tax on certain illiquid assets can be paid in instalments over up to 10 years, and in exceptional cases HMRC can allow a grant on credit where there is genuinely no way to fund the tax first.

Which combination suits a given estate depends on its shape, and where the choice touches on what a beneficiary does with their pension entitlement it can amount to a regulated financial matter. This page explains the mechanisms as fact; it is not financial or legal advice, and decisions about pension benefits themselves are ones for the beneficiaries with regulated financial advice where needed.

Liability: what "personal representatives are responsible" actually means

Personal representatives are liable for the IHT on the estate, now including the pension element. In practice that means HMRC looks to you, as executor, to deliver a correct account and pay the tax from estate (and pension) funds. It does not mean the tax comes out of your own money in a properly run administration. The risk arises at the edges: if you distribute the estate before the pension IHT is settled and the money to pay it is gone, HMRC can pursue you personally for the shortfall, and recovering overpaid amounts from beneficiaries afterwards can be slow and uncertain.

The protective habits are the ordinary ones, applied firmly: do not distribute until the IHT position, including pensions, is settled or clearly funded; keep every scheme letter and valuation; and document the dates of your information requests so delays are visibly not your doing. Cases involving minor or incapacitated beneficiaries, hard-to-trace schemes or overseas pensions justify professional help early. None of this should, by itself, frighten a would-be executor out of taking on the role; it adds a workstream, not a trap, provided the pension inventory starts early. Our executor hub collects the wider guidance, and if you are a pension holder wanting to make this easier for your own future executors, see our page for pension holders preparing for 2027.

Estimate the exposure before the paperwork starts

Because the pension is aggregated with the rest of the estate, a rough early estimate tells you whether you are administering an estate with a modest reporting duty or a six-figure tax event that needs funding routes planned from week one. Our free pensions IHT 2027 estimator combines the estate value, the pension value and the available nil-rate bands to show the likely position in a couple of minutes. For the full background to the reform itself, see the pillar guide to the 2027 pension IHT reform.

If the estate you are handling has substantial pension savings, a complex beneficiary picture or a tax bill that will need bridging, this is exactly the situation where a specialist earns their fee. We can connect you with a vetted probate specialist who deals with pension-heavy estates; there is no obligation, and even a single fixed-fee conversation early on can prevent an expensive misstep later.