Pension inheritance tax · from 6 April 2027
What could your family keep from April 2027?
From 6 April 2027, most unused pensions could count towards your estate for inheritance tax. If you die at 75 or older, your family may also pay income tax on what they draw. See what that could mean for what reaches them.
- Could pass to your family£987,062
- Inheritance tax£180,000
- Income tax on the inherited pension£282,938
Illustration only, not regulated financial advice. Income tax is what your heirs pay when they draw the inherited pension. It is worked out band by band, stacked on top of the income you set above, and spread over 5 years. After age 75 it already applies today, so it is not new. The 6 April 2027 change is that unused pensions also count towards inheritance tax, which can stack on top. Assumes both deaths at or after 75, and treats the rest of your estate as a main home passing to direct descendants: the residence allowance is capped at the lower of that figure and £175,000 each, so the allowance used here is £1,000,000. A buy-to-let or other property nobody lived in would not add to it. Your heirs’ real tax depends on their own income and how many years they draw it over, and the full app lets you model both.
A quick preview of this one question. The full tool works from your own figures (income, spending, one-off costs, tax and inheritance) in a single connected plan.