With pension death benefit rules set to change from April 2027, now is the time to revisit Expression of Wish forms. Fidelity Adviser Solutions’ Paul Squirrell explores the practical planning considerations, potential pitfalls and what advisers should do if a client dies with outdated instructions.
Key points:
- The proposal for IHT to apply to unused pension funds relates to deaths after April 2027.
- Best practice is to complete an Expression of Wish form assuming the client dies tomorrow – it can be updated should circumstances change.
- If a client dies with an out-of-date Expression of Wish, the trustees should be provided with any relevant information before they make their decision on how the benefits are distributed.
As you will know, the former Chancellor announced in the October 2024 Budget that the majority of unused pension funds, including discretionary arrangements, will be subject to Inheritance Tax from April 2027.
Following that Budget, I have had countless conversations with advisers about what this means for financial planning both now and when the new rules take effect. It’s worth noting the legislation to bring pension funds within the scope of IHT affects deaths that occur on or after 6 April 2027 and so pensions remain outside the scope of IHT if death occurs before that date. That can cause a dilemma when updating an Expression of Wish form.
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