Lauren Marlow and Sabrina Sears, Managing Associates in Mishcon de Reya's Private Wealth and Tax team have responded to HMRC’s consultation on the draft secondary legislation on changes to the information sharing regulations in connection with Inheritance Tax (IHT) on pensions due in April 2027.
It is evident that HMRC needs to address the practical and financial burden placed on personal representatives (PRs) within the draft secondary legislation. Two principal concerns have been raised:
Firstly, HMRC need to provide clear guidance on the evidentiary standards pension scheme administrators should apply when identifying prospective PRs. This is particularly difficult when there is no Will. The rules for those who can apply to be appointed can be legally complex and take time, especially if the deceased is based outside of the UK. We have also raised that the requirement for the grant as part of the process will drive an increase in grant applications where they are otherwise not required, putting further strain on the probate registry.
Secondly, placing inheritance tax reporting obligations on PRs means that they will bear substantial additional administrative responsibilities under the new regime but have no clear mechanism to recover the associated costs as the pensions usually fall outside of the estate.
Read more on the Technical note: Inheritance Tax on pensions from 29 May 2026.