Checklist

IHT on pensions — administrator readiness checklist

From 6 April 2027, most unused pension funds and death benefits enter the member’s estate for IHT. Personal representatives (PRs) are liable — not scheme administrators — but the machinery runs through the scheme: SI 2026/818 (made 13 July 2026, in force 6 April 2027) inserts regs 10C–10M into the Provision of Information Regulations 2006, a per-death information flow with 14- and 28-day statutory clocks that administration processes must be built to hit ^leg. This is the preparation sequence; the policy background, liability model and numbers are in IHT on pensions from April 2027.

Not advice — and guidance is still coming. The duties below are settled law (a made SI and Finance Act 2026), but HMRC’s supporting guidance, tools and the “pensions direct payment scheme” mechanics are still to be published — see section 8 ^HMRC.

1. Confirm scope for your scheme’s benefits

• Map which of your benefits are in scope — most unused funds and death benefits, DB and DC alike, with the discretionary/non-discretionary distinction removed ^HMRC.
• Map the exclusions: all death-in-service lump sums from registered schemes (a reversal of the original proposal), benefits payable only as a dependants’ scheme pension, pension-linked life policies, survivors’ joint- life annuity rights — with trivial commutation tested on the underlying pension income, not the lump sum ^HMRC. Full detail in IHT on pensions from April 2027.

2. Build the valuation response — the reg 10C–10F clocks

• 28 days from the PR’s request: supply scheme/administrator identity, the member reference, whether the scheme is investment-regulated, and the value of the notional pension property at date of death — flagging any provisional estimate and why. Note the operative clock runs from receipt of the PR’s request (the 2025 policy papers described “four weeks” from death notification; the made SI pegs it to the request) ^leg.
• True up a provisional value within 14 days of ascertaining the actual — so build a documented provisional-vs-final valuation workflow ^leg.
• The exempt-split percentages (charities/clubs; spouse or civil partner; other exempt beneficiaries): due by the later of the 28-day deadline or 14 days after beneficiaries are decided under scheme rules ^leg.
• Where an IHT account must be filed (regs 10E/10F): the fuller dataset — each beneficiary’s name, address and NI number (trust name and trustees where a beneficiary is a trust), per-beneficiary value and percentage, and whether any excluded-benefit payments have been or will be made — same later-of-28/14-days deadline ^leg.
• Insurers have mirror duties (regs 10D/10F) where a lifetime annuity or scheme pension was bought with scheme funds — agree who answers what if your scheme has insured tranches ^leg.

3. Build withholding-notice intake (regs 10G–10I)

• Confirm receipt and rule on validity within 14 days of any notice purporting to be a withholding notice from a PR or prospective PR — with a reason if you treat it as invalid ^leg.
• If valid: state the withheld amount within 28 days of the notice (flagging provisional estimates), with per-beneficiary amounts once decided ^leg.
• Tell beneficiaries a notice is in force — the date received and the notice-giver’s contact details, within the later-of-14-days formula — and if rights transfer to another scheme while a notice is live, tell the notice-giver where the funds went ^leg.

4. Build the payment conduit and its confirmations (regs 10J–10M)

• Be ready to pay HMRC on a payment notice — where a beneficiary (or PR) directs it, the scheme pays the IHT attributable to that benefit direct to HMRC as an authorised payment, not subject to Income Tax, reducing the beneficiary’s entitlement accordingly ^HMRC.
• Issue the confirmations within 14 days of each payment — member name, date of death, IHT reference, tax and interest paid, payment date and HMRC payment reference — to the paying beneficiary, the PRs, and each affected beneficiary as regs 10J–10M require for the route used ^leg.
• Know all three settlement routes so member-facing teams can explain them: PR pays from the free estate (with the IHTA reimbursement right); beneficiary directs the scheme to pay; beneficiary takes benefits in full and settles with HMRC directly, reclaiming any double-charged Income Tax ^HMRC.

5. Rewrite beneficiary and PR communications

• New duty: tell non-exempt beneficiaries IHT may be due on their pension, and set out their payment options, when first informing them of their benefits — this is a communication duty to beneficiaries, not just information-sharing with the PR ^HMRC.
• Confirm full distribution to the PR at the end of the process, with lump-sum amounts and identities for the Lump Sum and Death Benefit Allowance cross-check ^HMRC.
• Update the amended reg 8 responses: where a lump sum death benefit exhausts the member’s LSDBA, headline details go to the PR within 3 months of the final payment and the fuller beneficiary-level dataset within 1 month of a PR request — now including any s226B(6) IHTA reduction to a beneficiary’s entitlement ^leg.

6. Get the data and triggers ready

• Create a “beneficiaries decided” process event — half the reg 10C–10M deadlines key off the date beneficiaries are decided under scheme rules, so the administration system needs that date as a recorded trigger feeding the 14-day clocks ^leg.
• Collect a richer beneficiary dataset — name, address, DOB, NI number, and trust details where a beneficiary is a trust: materially more than many discretionary schemes hold at the point death is notified ^leg.
• Watch the two-year window tension — the existing rule that tax-free death-benefit lump sums become Income-Taxable if unpaid two years after death continues unchanged alongside the new IHT clocks; how the pressures reconcile is left to forthcoming guidance ^HMRC.
• Discretionary decisions can still take their time — the later-of formulae deliberately let the trustee decision process run past the valuation stage; what cannot slip are the request-keyed clocks in section 2 ^leg.

7. Systems deadlines in the same runway

• Migrate all open schemes to Managing Pension Schemes by 31 December 2026 — Newsletter 183 confirms the pension schemes online service closes from April 2027 (the date the earlier newsletter left open), with service limitations likely as closure nears ^HMRCHMRC.
• Digitise any residual paper reporting — SI 2026/818 extends mandatory electronic submission to all reportable events in the event-report table, removing the previous carve-outs ^leg.
• PRs’ own HMRC deadline moves from 30 days to 2 months (amended reg 10) — useful context when PRs chase, but their clock is not yours ^leg.

8. Watch for what’s still to come

• HMRC guidance and tools for PRs, schemes and beneficiaries — committed, not yet published ^HMRC.
• Event 25 death-in-service reporting is dropped — Newsletter 183 (30 July 2026) confirms that, in response to consultation, the proposed requirement to report death-in-service benefits via Event 25 has been removed. Instead, administrators must give PRs alternative information on excluded benefits — e.g. the initial annual rate of a dependants’ scheme pension or the amount of each death-in-service payment — so build that into the reg 10E/10F excluded-benefit datastream rather than an Event 25 return ^HMRC.
• Two further consequential SIs are expected later in 2026 — amending the Splitting of Schemes Regs 2006 (sub-scheme administrators) and the IHT Excepted Estates Regs 2004 (so pension-holding estates can still be excepted); watch for them, as they may add sub-scheme reporting obligations ^HMRC.
• A further HMRC technical note is due “later this summer” (2026) — covering withholding and payment notices, worked scenarios and common industry queries; it should fill the gaps the section-4 payment-notice skeleton flags ^HMRC.
• The “pensions direct payment scheme” — named in the 11 May 2026 technical note, whose full mechanics are not yet in the corpus (the note’s body sits in an uncaptured attachment); treat the payment-notice process in section 4 as the statutory skeleton pending that detail ^HMRC.
• The nil-rate-band calculator proposed under the original PSA-led design — not re-confirmed under the final PR-led model ^HMRC.
• A digitalised IHT service in 2027–28 — a separate but coincident HMRC build ^HMRC.
• Newsletter signposting — HMRC has said it will use the pension schemes newsletter to flag preparation actions and guidance as they appear; keep it on the monitoring list ^HMRC.

How to use this

Treat April 2027 as a process-build deadline, not a tax change to read about: scope your benefits (1), build the deadline-keyed response flows (2–4), rewrite the communications (5), wire the data triggers (6), and clear the systems prerequisites — MPS migration first (7) — while tracking the guidance gaps (8). The policy detail, liability model and numbers are in IHT on pensions from April 2027; the wider tax landscape is Pensions tax — abolition of the Lifetime Allowance, the new lump sum allowances, annual allowance, and IHT on pensions.

Related

IHT on pensions from April 2027 — the reform in full · Pensions tax — abolition of the Lifetime Allowance, the new lump sum allowances, annual allowance, and IHT on pensions · Record-keeping (TPR General Code module) · Scheme-governance year calendar · Key dates — the UK pensions reform timeline · Pensions compliance checklist — obligations now in force.