UK Pensions and Inheritance Tax Changes from April 2027
Understand how the new rules could affect UK pension holders and beneficiaries living in the US.
From April 6, 2027, most unused UK pension funds and pension death benefits will be included when the value of a deceased person’s estate is calculated for UK Inheritance Tax (IHT) purposes.
For UK pension holders living in the US, the change may affect estate planning, beneficiary choices and how any resulting liability is funded. BlackPoint Capital Partners helps clients assess these issues across both their UK and US financial affairs.
What Is Changing for UK Pensions in April 2027?
Most unused UK pension funds and pension death benefits will generally be included when the value of a deceased person’s estate is calculated. This does not mean every pension will face a 40% tax charge, as the outcome will depend on the wider estate, available allowances, exemptions and the type of pension benefit involved.
Unused funds held in many Self-Invested Personal Pensions are expected to fall within the new rules. The change may affect beneficiary planning, liquidity and how a SIPP is considered alongside the member’s other estate assets. It does not automatically mean that withdrawing or transferring the pension is the right response.
Personal representatives, pension providers and beneficiaries may need to exchange information and coordinate how pension-related IHT is calculated and paid. Depending on the circumstances, beneficiaries may also need to be involved in dealing with any IHT attributable to the pension benefits they receive.
How UK Inheritance Tax May Apply When You Live in the US
Moving to the United States does not automatically remove a UK pension from UK Inheritance Tax. The outcome can depend on the member’s long-term UK residence status, where the pension scheme is established, the type of benefits involved and who receives them.
US tax and reporting rules may also apply. A proposed pension withdrawal, transfer or beneficiary decision should therefore be assessed under both UK and US tax rules, rather than by reference to UK Inheritance Tax alone.
Why Choose BlackPoint Capital Partners
BlackPoint Capital Partners specializes in personalized financial planning for UK expats living in the US. We help clients understand how their UK pensions interact with their US assets, retirement income needs and estate arrangements, working alongside UK and US tax professionals and attorneys when appropriate.
Our role is to bring those considerations together so clients can make informed decisions across both countries.
Download the UK Pensions and Inheritance Tax Guide
This complimentary guide explains the rules taking effect on April 6, 2027, and the practical implications for UK pension holders, personal representatives and beneficiaries.
It covers which pension funds and death benefits may enter the estate, how UK residence and pension-scheme location can affect the position, and what the changes could mean for SIPPs. It also outlines how pension-related IHT may be paid and the questions to consider before the rules take effect.
Download your complimentary copy below.
Ready to Review Your UK Pension?
Speak with BlackPoint Capital Partners about the April 2027 changes and what they may mean for your UK and US financial plans.