What Happens to a UK Pension/QROPS When You Die? UK IHT Changes From 2027
Death-benefit taxation is fact-specific. From 6 April 2027, UK legislation brings most unused UK pension funds and pension death benefits into the value of a deceased person’s estate for UK Inheritance Tax purposes.
The UK rule is changing
Finance Act 2026 legislated the change for deaths on or after 6 April 2027. HMRC is continuing to publish implementation guidance. This makes old marketing statements about UK pensions being automatically outside inheritance tax particularly risky.
Death benefits can also interact with income-tax rules, beneficiary status, the member’s age at death, residence/domicile concepts and the legal form of the pension arrangement.
QROPS can offer different beneficiary and estate-planning features, but tax treatment depends on the member, beneficiary, residence, scheme and law at the time of death. Obtain UK and Indian tax advice for estate-planning decisions.
Frequently asked questions
Does QROPS eliminate inheritance tax?
Cross-border death-benefit treatment depends on the facts and law in force.
What changes in April 2027?
Most unused UK pension funds and pension death benefits will be brought into the deceased’s estate for UK IHT purposes, subject to the detailed rules and exceptions.
Should nominations be kept updated?
Yes. Beneficiary/nominated-person records should be reviewed after major family or residence changes, subject to scheme rules.
Speak to QROPS Direct
If you are considering transferring your UK pension to India, speak to QROPS Direct before taking any action. We can review your pension arrangements, transfer eligibility and the key considerations relevant to your individual circumstances.
