2027 Inheritance Tax & Pensions Shake Up: Everything You Need to Know

Key Topics Covered:

1. What Changes in April 2027

• Unused pensions will count towards inheritance tax.
• Anything above the tax-free limit may be taxed at 40%.
• More families will be affected due to frozen allowances.

2. Executors, Lost Pensions and Hidden Traps

• New burdens and risks for executors who must locate and report all pensions.
• The scale of “lost pensions” and how to track them down.
• When to consider consolidating multiple pots and when to seek advice.

3. Income vs Capital and Smart Gifting

• IHT as a tax on capital, not income.
• Annual allowances, the 7‑year rule and “gifts with reservation”.
• How gifts out of surplus income can be unlimited and IHT‑free if well documented.

4. Pensions, Annuities and Who’s Affected

• Which pensions are not treated as capital (state, final salary, annuities).
• Which are caught by the new rules (personal pensions, SIPPs, SSAS, DC workplace schemes).
• Pros and cons of using annuities to swap capital for income.

5. SSAS Pensions and Multi‑Generational Planning

• What a SSAS is and who can qualify (limited company owners).
• Using SSAS to consolidate pots, invest entrepreneurially and involve adult children.
• Strategies like contributions for children, earmarking and loanback to shift value down the bloodline.

6. Life Cover, Wills and the Family Wealth Fortress

• Why life insurance should be written in trust to avoid swelling your estate.
• Using whole‑of‑life, second‑death cover to fund an inevitable IHT bill.
• The basics everyone should have in place: will, LPAs, and an annual “estate stock take”.

Actionable Takeaways:

• Assume the 2027 rules will affect you if you have pensions and other assets – start planning now.
• Calculate your current estate and repeat annually to see how close you are to IHT thresholds.
• Trace and tidy up old pensions; don’t leave a mess for your executors.
• Learn the difference between gifting capital and gifting surplus income – and document income gifts carefully.
• Review life cover and trusts; consider SSAS if you’re a business owner wanting to build and pass on wealth efficiently.

Resources & Next Steps:

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