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Could you be hit with an inheritance tax bill long after an estate is settled?
Fixed quotes for agreed services ››Newsletter issue – September 2026
Experts have highlighted several practical and policy concerns about the Government's planned inheritance tax (IHT) changes for pensions, set to take effect from April next year. They warn that the proposals do not account for lost or forgotten pensions, which are common. Lost pensions total £31bn, averaging £9,470 each, and the value of unclaimed pots has risen 60% since 2018 according to Pensions UK.
If a pension is found years after someone's death, the IHT bill for the entire estate may need to be recalculated, potentially reopening settled estates. Executors will not be liable for any tax due on pensions discovered after they have already received clearance from HMRC confirming that all inheritance tax due has been paid. Instead, HMRC would need to revisit the initial calculations, including any tapering of the residence nil-rate band, potentially landing beneficiaries with an additional tax bill years down the line.
The Chartered Institute of Taxation (CIOT) calls the proposals "highly unsatisfactory", warning of unfair tax bills, delays in settling estates, disputes between families, pension providers and executors, and an increased administrative and compliance burden for HMRC. The CIOT said that the new rules should be changed so that a pension discovered after an estate has been wound up should incur IHT at a flat rate, which would vary depending on the tax position when an estate was finalised.
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