HMRC: Most estates will still not pay IHT after pension change

As of April 6, 2027, defined contribution pensions will be subject to inheritance tax (IHT) at a standard rate of 40%. This change will affect approximately 10,500 estates, with an additional 38,500 facing increased IHT liabilities. Executors will need to obtain valuations from pension providers and beneficiaries will pay income tax on remaining funds after IHT is applied. HMRC notes that more than 90% of estates will continue to pay zero IHT after the changes.