What the new inheritance tax rules could mean for SIPP and SSAS clients

From April 2027, the way pension savings are treated for inheritance tax purposes will change fundamentally. Following the Chancellor's 2024 Autumn Budget announcement, unused pension funds and certain death benefits will no longer be exempt from inheritance tax — a shift that overturns decades of estate planning strategy and will affect a significant number of SIPP and SSAS holders. 

The practical implications are wide-ranging. Under the Finance Act 2026, personal representatives will bear responsibility for any IHT due on pension assets, with scheme trustees permitted to withhold up to 50% of taxable benefits for up to 15 months after a member's death to allow time for valuation and, where necessary, the sale of scheme assets. For schemes holding illiquid assets such as commercial property or unquoted shares, this presents particular challenges that members would be wise to start addressing now. 

There is, however, still time to plan. Working with a regulated financial adviser, members may be able to estimate their potential liability, explore available exemptions, and consider strategies to reduce the impact on their estate. Where an IHT bill looks unavoidable, trustees will also need to consider how it can be funded — whether through asset sales, borrowing, or appropriate life cover.

Read the full article to understand what questions you should be asking and what steps to consider before the rules come into force.