Legislation – Finance Act 2026

Finance Act 2026, Section 69 is up to date with all changes known to be in force on or before 16 April 2026. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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Part 2Inheritance tax

Pension interests

69Connected amendments to IHTA 1984

(1)

IHTA 1984 is amended as follows.

(2)

Omit section 12A (pension drawdown fund not used up: no deemed disposition).

(3)

In section 18 (exemption for transfers between spouses or civil partners), after subsection (3) insert—

“(3A)

To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property—

(a)

the value transferred is treated for the purposes of this section as also attributable to any property that the person’s spouse or civil partner receives, or has a present or future right to receive, under the scheme on the death of the member otherwise than as an excluded benefit;

(b)

the estate of the transferor’s spouse or civil partner is treated for the purposes of subsection (1) (so far as would not otherwise be the case) as increased by the value of any property that they receive, or have a right to receive, as mentioned in paragraph (a), and

(c)

subsection (3) does not apply in relation to the transfer of value.”

(4)

In section 23 (gifts to charities or registered clubs), after subsection (5A) insert—

“(5B)

To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property—

(a)

the value transferred is treated for the purposes of this section as also attributable to any property that on the death of the member is given under the scheme to charities or registered clubs, and

(b)

subsection (2) does not apply in relation to the transfer of value.”

(5)

In section 24 (gifts to political parties), after subsection (4) insert—

“(5)

To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property—

(a)

the value transferred is treated for the purposes of this section as also attributable to any property that on the death of the member is given under the scheme to a political party qualifying for exemption under this section, and

(b)

section 23(2) does not (despite subsection (3)) apply in relation to subsection (1).”

(6)

In section 24A (gifts to housing associations), after subsection (3) insert—

“(4)

To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property—

(a)

the value transferred is treated for the purposes of this section as also attributable to any land in the United Kingdom that on the death of the member is given under the scheme to a body falling within subsection (2), and

(b)

section 23(2) does not (despite subsection (3)) apply in relation to subsection (1).”

(7)

In section 25 (gifts for national purposes etc), after subsection (3) insert—

“(4)

To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property—

(a)

the value transferred is treated for the purposes of this section as also attributable to any property that on the death of the member is given under the scheme—

(i)

to a body within Schedule 3, or

(ii)

in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to nation), and

(b)

section 23(2) does not (despite subsection (2)) apply in relation to subsection (1).”

(8)

In section 27 (maintenance funds for historic buildings etc), after subsection (2) insert—

“(3)

To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property—

(a)

the value transferred is treated for the purposes of this section as also attributable to any property—

(i)

that on the death of the member is given under the scheme to a person and becomes comprised in a settlement, and

(ii)

in respect of which the condition in subsection (1)(a) or (b) is met, and

(b)

section 23(2) does not (despite subsection (2)) apply in relation to subsection (1).”

(9)

In section 151 (treatment of pension rights etc)—

(a)

for the heading substitute “Other provision about pension interests”;

(b)

for subsections (2) and (3) substitute—

“(3)

Sections 49 to 53 (holder of interest in possession treated as directly entitled to property in which interest subsists etc) do not apply in relation to an interest in possession in property where the property is held for the purposes of a registered pension scheme, a qualifying non-UK pension scheme or a section 615(3) scheme.”;

(c)

omit subsection (4).

(10)

Omit section 152 (cash options).

(11)

After section 218A insert—

“218BPensions: information powers

(1)

The powers conferred on the Board by section 251 of the Finance Act 2004 (powers relating to the provision and preservation of information in connection with pensions) are exercisable for the purposes of this Act.

(2)

Subsection (1) is without prejudice to the generality of that section of that Act.”

(12)

In section 272 (general interpretation), in subsection (1)—

(a)

in the definition of “member”, after “scheme,” insert “a qualifying non-UK pension scheme or a section 615(3) scheme,”;

(b)

at the appropriate places insert—

““excluded benefit”, in relation to a pension scheme, has the meaning given by section 150A(6);”;

““exempt benefit”, in relation to a pension scheme and a deceased member of the scheme, has the meaning given by section 210(7);”;

““notional pension property”, in relation to a member of a pension scheme and a pension scheme, means property to which the member is treated under section 150A(1) (certain pension property treated as part of estate) as having been beneficially entitled immediately before their death by reference to the arrangements under the scheme;”;

““qualifying non-UK pension scheme” has the meaning given in section 271A;”;

““the scheme administrator”, in relation to a registered pension scheme, has the meaning given in section 270 of the Finance Act 2004;”.