HMRC’s first technical note explained the broad architecture of the new Inheritance Tax regime for pensions. Its second, published on 27 August 2026, is more practical: it begins to show how estates involving significant pension wealth will actually need to be administered from 6 April 2027. For an overview of the changing landscape, see our earlier blog on HMRC’s first technical note.
For advisers, the key questions now concern process, timing and risk: when information can be obtained from schemes, how quickly schemes must respond, when withholding should be considered, whether tax should be paid before beneficiaries are finally identified, and how executors can protect themselves if further pension rights emerge later.
Can executors get the information they need before Confirmation or Probate?
Yes. This is one of the most important practical points in the second technical note.
One practical consequence of the new regime is that pension providers will have to engage with executors at an earlier stage than has traditionally been common. The absence of a formal grant of Confirmation or otherwise will not necessarily prevent the exchange of information required to determine the Inheritance Tax (“IHT”) position. The lack of a will or executor willing / able to act is not likely to present an issue: HMRC directs that pension scheme administrators should disclose the information required to those that anticipate becoming the executor of an estate, provided the scheme administrator is satisfied as to their identity and basis for acting.
That should remove a potentially awkward circularity. Executors may need pension values to establish the IHT position and progress the executry, but cannot do so efficiently if the scheme will not release information until a formal grant has already been obtained.
How quickly will pension schemes have to provide information?
The information sharing obligations arise at several points during the administration. They begin with the initial pension valuation and may later extend to beneficiary-level information, withholding arrangements, payments of IHT from pension funds and reporting connected with relevant lump-sum death benefits.
In the ordinary case, the value (or estimated value) of unused pension funds and pension death benefits must be provided within 28 days of the pension scheme administrator receiving a request for it. Where the valuation cannot yet be finalised, the scheme may report an estimated amount, but the basis for that estimate must be explained and the definitive figure supplied once it has been established. Where an IHT account is required, further information can then be requested, including the proportion of the pension funds and death benefits attributable to each beneficiary.
The practical significance is the dependency this creates. Where pension wealth is material, the IHT analysis may not be capable of being finalised until scheme information has been obtained. Identifying relevant arrangements and satisfying verification requirements will therefore need to happen early in the executry.
When should a withholding notice be used?
The first technical note explained the withholding mechanism. The second makes its practical importance clearer.
Its utility is obvious: when able to be used, a withholding notice allows 50% of the pension or relevant death benefits to be retained by scheme administrators to settle the IHT owed in relation to the pension or death benefits. If a scheme administrator fails to comply with such a notice, they will share liability for the IHT due on the pension or death benefits with the executors.
The practical difficulty is that the protection is prospective. Once the relevant benefits have been distributed, a later notice cannot recover them. Advisers therefore have to balance the advantage of waiting for a clearer IHT calculation against the risk that delay removes the opportunity to preserve funds.
Should IHT be paid before beneficiaries are finally identified?
Potentially, but the timing requires care.
Under the Pensions Direct Payment Scheme, an executor or pension beneficiary can (in most cases) require a registered pension scheme to pay IHT attributable to the pension directly to HMRC. A valid notice must generally involve at least £1,000, and the scheme has 35 days from receipt of a valid notice to make payment.
For estates with significant pension wealth but limited liquidity elsewhere, that facility could be particularly useful.
What protection is available if another pension turns up later?
This is where HMRC clearance may become increasingly important.
HMRC’s second technical note states that, where the applicable conditions are satisfied, clearance can protect executors from personal liability for additional IHT if a previously unknown pension benefit is discovered later, although the newly identified asset must still be reported and the beneficiary may bear the resulting tax. HMRC expects an application for clearance to be made only once the estate and its IHT position are substantially settled, subject to specified minimum waiting periods. For clients with multiple occupational, personal or historic pension arrangements, that is an important risk-management point.
What remains unresolved?
HMRC has already indicated that Technical Note 3 is intended to address further questions, including the relationship between IHT and Income Tax and points concerning charities and trusts. For advisers to high-net-worth individuals, those are significant areas.
For now, Technical Note 2 makes one practical point increasingly clear: pension administration will no longer merely sit alongside the executry. In many estates, it will help drive it.
