Finance Act 2026 increases pension IHT for deaths after age 75

8 articles · Updated · Tax Journal · Apr 22

The Act, enacted on 18 March, raises the effective tax rate on pension funds to as much as 67% for deaths occurring after age 75, starting 6 April 2027.
Unlike previous rules, the new law restricts inheritance tax credits for pension funds, resulting in significantly higher combined tax liabilities for beneficiaries of those over 75.
For deaths under 75, the IHT deduction remains, but older savers now face losing up to two-thirds of undrawn pension savings due to the amended tax treatment.

Will the new 'birthday tax' at age 75 force retirees into making rash financial choices?

Has the new inheritance tax law killed the strategy of using pensions for family wealth transfer?

Is the new pension tax a fair reform or simply a Treasury 'inheritance tax raid'?

Are executors facing an impossible task with the new six-month pension IHT payment deadline?

How does the UK's pension tax change create a double-taxation trap for those with US connections?