Apportioned inheritance tax, the beneficiary's income tax on top and the two HMRC dates, for deaths from 2027-04-06
Scope of the 2027 rule
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Inheritance tax charged on the pot
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GBP
Beneficiary income tax after the IHT relief
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GBP
Total tax taken from the pot
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GBP
Net the beneficiary keeps
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GBP
Effective rate on the pot
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%
HMRC interest starts
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IHT account and penalties from
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Handling more than one estate? Export each estate as a .csv audit row and set browser alarms for the 6-month interest date and the 12-month account date on every case you enter.
$60 once · one licence key per person or team seat · A UK IFA charges 150-350 GBP an hour in 2026 and an IHT solicitor 265-390 plus VAT, so one estate’s pension figure is a 300 GBP job.
Apportioned IHT, not a flat 40 percent Nil-rate bands spread across the whole estate, so the pot only carries its pro-rata share. On the built-in defaults a 500000 pot is taxed 245000 and the beneficiary keeps 255000, an effective 49 percent; a flat 40 percent of the pot would have said 200000. Finance Act 2026, Royal Assent 2026-03-18.
Income tax on top, with the IHT slice relieved For a death at 75 or over the beneficiary still pays income tax, but not on the part equal to the IHT due on that pension: 425000 of the default 500000 pot, not the whole pot. An additional-rate beneficiary on a fully taxable pot lands at 67 percent, not the 85 percent a naive stack gives.
The two dates the personal representatives own HMRC interest runs from the end of the sixth month after the month of death - 2027-12-31 for a 2027-06-10 death - and the account and penalties follow twelve months after the month of death, 2028-06-30. Personal representatives report and pay, not the scheme administrator.
Spouse, charity and death in service stay out A pot passing to a surviving spouse or civil partner, or to a registered charity, carries no IHT; death-in-service benefits, dependants' scheme pensions and joint-life annuities stay outside the member's estate. Income tax can still apply to a spouse when the member died at 75 or over.
Deaths from 2027-04-06 only The tool dates the death and says which side of 2027-04-06 the estate falls on. Before that date the pot is outside the estate and only the age-75 income tax applies, so the same 500000 pot can pass whole.