HMRC Details Information-Sharing for New Pensions IHT Regime
UK pension scheme administrators and personal representatives have new guidance on the information-sharing duties required when inheritance tax applies to pension death benefits from April 2027.
HM Revenue & Customs has published "Technical Note 2," providing further guidance on the information-sharing process between pension scheme administrators (PSAs) and personal representatives (PRs) for the new inheritance tax (IHT) regime applying to many pension death benefits from April 2027. The new rules create significant administrative duties for schemes and those managing estates.
The guidance clarifies the five stages at which PSAs and PRs may need to exchange information, from initial death notification to the direct payment of IHT from pension funds. It also details the verification process for PRs and confirms that time limits for PSAs to respond do not begin until they receive reasonably requested evidence of a PR's status. The note includes draft templates for "withholding notices" and "direct payment notices," which schemes can adapt. This development is critical for counsel advising pension schemes on new compliance workflows and for private client lawyers assisting with estate administration, as failure to follow the new procedures could lead to complications and potential liabilities. PSAs should now review their processes and prepare to implement these changes.