How to complete IHT409: pensions and Inheritance Tax explained
The most common question executors ask is 'does the pension count for IHT?'
For most people, the answer is no — but the form still has to be completed to explain why.
This walkthrough covers the three categories of pension (those that are always outside the estate, those that might be inside it, and from April 2027 those that will be inside it), what information each pension provider needs to give you, and the separate question of pension death benefits that have already been paid.
✓ Official source checked 2 September 2026 · GOV.UK last revised this form 28 September 2023IHT409 on GOV.UK ↗
United Kingdom·Informational, not legal or financial advice·Official source: GOV.UK
✓Official form · always current
This is the same official IHT409 file HM Revenue & Customs publishes on GOV.UK — the link below fetches the current version live from GOV.UK the moment you click it, so it can never go out of date.
Current version: September 2023 · confirmed on GOV.UK 2 September 2026
This walkthrough takes IHT409 field by field, in plain English. Most pensions sit outside the estate — but you still have to file IHT409 to prove it; the hard part is spotting the handful of pensions that ARE inside the estate, and knowing that the rules change for deaths on or after 6 April 2027.
The pensions executors wrongly leave off
Failing to check whether a pension has an 'alternatively secured pension' (ASP) element, or whether the member had already taken their tax-free cash lump sum and was waiting to crystallise the remainder.
In these cases, part of the pension may be an estate asset.
Many executors assume all pensions are outside the estate and skip IHT409 entirely — HMRC will ask about it.
The form, in summary
The IHT409 form, in summary.
Valoren
IHT409·6 pages·32 fields guided
With Valoren30 minutes
with pension details already recorded in the vault
Without Valoren1–2 hours
obtaining pension scheme details from providers can add days or weeks
Most UK registered pension death benefits are paid at the discretion of the pension trustees and therefore fall OUTSIDE the estate for IHT purposes.
The scheme administrator or trustees pay the death benefits to whoever they decide (guided by, but not bound by, the member's expression of wishes).
Because the member never had a legal right to direct the payment, it is not an asset of the estate.
Important exceptions exist — and from April 2027, unspent pension pots and uncrystallised funds will be included in the estate for IHT, fundamentally changing the landscape.
·Who Files — The executor or administrator, as part of the IHT400 account
·6 pages · 32 fields guided
·Draws from your Estate File — Financial Accounts, Succession Plan
Section01
§11
Section 1
Why pensions are usually outside the estate — and why it matters
The reason most pensions escape IHT is that the member never actually owned the death benefit.
The pension scheme trustees own the fund and have discretion over who receives it on the member's death. Because the member had no enforceable right to direct the payment, it is not part of their estate.
01
The discretionary trust structure
UK registered pension schemes are structured so that death benefits are held in discretionary trust by the trustees.
The member can complete an 'expression of wishes' (or 'nomination of beneficiaries') form telling the trustees who they would like to receive the benefits — but the trustees are not legally bound to follow it.
Because the member could not compel payment, HMRC does not treat the uncrystallised fund as part of the estate.
02
Why expression of wishes forms matter
Although trustees are not bound, they almost always follow the member's wishes if a valid expression of wishes form is on file.
Without one, trustees must decide who should receive the death benefit — which may mean the spouse by default, but can result in delays and disputes.
Expression of wishes should be updated after every major life event: marriage, divorce, birth of a child, death of a named person.
03
What IHT409 actually asks you to confirm
Even if all the pension funds are discretionary and therefore outside the estate, IHT409 requires you to list every pension arrangement the deceased had, confirm who the scheme administrator is, state whether any death benefits were in payment (annuities), and confirm the position on each scheme.
HMRC uses this to verify that nothing has slipped into the estate.
The reason most pensions escape IHT is that the member never actually owned the death benefit.
HM Revenue & Customs (HMRC) · IHT409❦
Section02
§22
Section 2
When a pension IS inside the estate — the exceptions
Several situations cause part or all of a pension to form part of the taxable estate. These are the things IHT409 is checking for.
01
Pension in payment with a guarantee period
If the deceased was already receiving a pension and it had a guaranteed payment period (e.g. 5 or 10 years from commencement), the remaining guaranteed payments form part of the estate.
HMRC calculates the value as the capitalised value of the remaining guaranteed payments.
This applies to most defined benefit scheme pensions in payment with a guarantee.
02
Annuities that have already been purchased
Once a member converts their pension pot to an annuity (an irrevocable purchase), the annuity contract may include guaranteed minimum payment periods.
These guaranteed future payments are an estate asset.
If the annuity has no death benefits or guarantee, the payments simply stop on death and there is nothing to include.
03
Lump sums already being processed
If the member had taken their tax-free cash lump sum from the pension and was waiting for the funds to clear into their bank account at the date of death, those funds may be an estate asset (depending on timing).
Similarly, if the member had exercised a right to a specific lump sum payment that was pending at death, the right to receive it may be an estate asset.
04
Alternatively secured pensions (historical)
Alternatively secured pensions (ASPs) were a type of pension drawdown that existed before 2011.
If the deceased was drawing income from an ASP at death, the residual fund was potentially subject to IHT (at a punitive rate of up to 70%).
This was abolished for deaths after April 2011 and replaced by flexi-access drawdown, but is still relevant if the deceased was drawing from an ASP established before 2011.
Several situations cause part or all of a pension to form part of the taxable estate. These are the things IHT409 is checking for.
HM Revenue & Customs (HMRC) · IHT409❦
Section03
§33
Section 3
Defined benefit (final salary) pensions — what to report
Defined benefit pensions — most occupational schemes — typically pay a lump sum death benefit (often a multiple of salary) and a survivor's pension to the spouse or civil partner.
The lump sum is usually discretionary and therefore outside the estate. The survivor's pension is not an asset of the deceased's estate.
01
The lump sum death benefit
Usually expressed as a multiple of pensionable salary (e.g. 3× salary). Paid at the trustees' discretion.
Provided the scheme rules give the trustees genuine discretion (not just a token discretion), the lump sum is outside the estate.
Obtain a letter from the scheme administrator confirming this — HMRC may ask to see it.
02
Pension already in payment
If the deceased had already retired and was receiving a pension, check the scheme rules for guarantee periods.
If the pension was in its guarantee period, the remaining guaranteed payments need to be valued and included.
Contact the scheme administrator — they are required to provide the valuation.
03
Information to request from the scheme administrator
Write to the scheme administrator requesting: confirmation that death benefits are held in a discretionary trust; the value of any death benefit lump sum; whether any pension was in payment and details of any guarantee period; the name of the trustees.
Request this in writing — you may need to produce it to HMRC.
Defined benefit pensions — most occupational schemes — typically pay a lump sum death benefit (often a multiple of salary) and a survivor's pension to the spouse or civil partner.
HM Revenue & Customs (HMRC) · IHT409❦
Section04
§44
Section 4
Defined contribution, personal pensions, and SIPPs
Defined contribution pensions — personal pensions, SIPPs, stakeholder pensions, group personal pensions — accumulate a fund that the member then draws on in retirement.
On death, the undrawn fund is typically paid at the trustees' discretion.
01
Uncrystallised funds (pension not yet touched)
If the member died before accessing their pension at all, the full fund is typically at the trustees' discretion and outside the estate.
The pension provider will pay the fund (or purchase an annuity) for the nominated beneficiaries.
The value does not need to be included in the estate for IHT — but must be declared on IHT409.
02
Drawdown funds
Flexi-access drawdown allows the member to take income as needed.
The residual drawdown fund is paid at the trustees' discretion on death and is therefore outside the estate.
The value of the drawdown fund at date of death must be declared on IHT409 (even though it is not an estate asset) so HMRC can verify the tax treatment.
03
Multiple pension arrangements
Many people have several pension pots — a workplace pension from each previous employer, one or more personal pensions, and possibly a SIPP.
List them all on IHT409.
Each provider needs to be contacted separately for a death benefits statement. This takes time — start the process early.
Defined contribution pensions — personal pensions, SIPPs, stakeholder pensions, group personal pensions — accumulate a fund that the member then draws on in retirement.
HM Revenue & Customs (HMRC) · IHT409❦
Section05
§55
Section 5
April 2027 — the rule change that affects most estates
From 6 April 2027, unspent pension pots and uncrystallised pension funds will be included in the estate for IHT purposes.
This is the biggest change to pension IHT treatment in decades and will affect millions of estates.
01
What changes in April 2027
Under legislation in Finance Act 2024, from 6 April 2027 the value of unused pension funds (funds the member had not yet drawn from) will be included in the deceased's estate for IHT.
The pension scheme administrator will be responsible for reporting the value to HMRC and potentially paying IHT to HMRC directly before releasing the balance to beneficiaries.
The discretionary trust exemption that currently removes most pension funds from IHT will no longer apply to the undrawn fund.
02
What this means for estate planning
Pensions have been used as IHT-efficient vehicles for the last 10 years precisely because undrawn funds were outside the estate.
After April 2027, the IHT advantages of leaving money in a pension rather than drawing it down are significantly reduced.
Families should review pension nomination forms and consider whether drawdown strategy needs to change.
Estates where pensions account for a large part of total wealth may see their IHT position worsen substantially.
03
For estates where death occurred before April 2027
If the death occurred before 6 April 2027, the current rules apply — pension funds held in discretionary trust are outside the estate.
IHT409 should be completed under the rules that applied at the date of death.
The April 2027 change does not apply retrospectively.
From 6 April 2027, unspent pension pots and uncrystallised pension funds will be included in the estate for IHT purposes.
HM Revenue & Customs (HMRC) · IHT409❦
Many people file IHT409 themselves — that is what this walkthrough is for. If the estate behind it has stopped being simple — inheritance tax to pay, a trust, foreign assets, a dispute — Signum, Valoren’s own specialist desk, can take it on, and we say so plainly: it starts with a free intake, and if you do not need us, we will tell you. Prefer an independent adviser? STEP and the Chartered Institute of Taxation both keep public member directories, and neither pays Valoren a referral fee.
FAQ
IHT409 questions, answered.
IHT409 is the HMRC supplementary schedule, filed with the IHT400, that records the pensions and pension death benefits a person held when they died.
For deaths up to 5 April 2027, most UK registered pension death benefits are paid at the trustees' discretion and fall outside the estate, so they are usually not taxed — but you still complete IHT409 to set out each arrangement and show HMRC why nothing has slipped into the estate.
The executor (if there is a will) or the administrator (if there is not), as part of the IHT400 account for the estate.
It is filed with the IHT400, which must reach HMRC within 12 months of the end of the month in which the person died — though any Inheritance Tax owed is due earlier, by the end of the sixth month, with interest running after that.
Obtaining each scheme's death-benefit statement can take weeks, so it is worth contacting providers early.
No. IHT409 is a free supplementary schedule submitted with the IHT400 — there is no separate filing fee.
Under Finance Act 2024, for deaths on or after 6 April 2027 most unused pension funds are due to be included in the estate for Inheritance Tax, with the scheme administrator reporting (and potentially paying) the tax.
Some implementation detail is still being confirmed, so it is worth checking HMRC's guidance and considering professional advice before changing any drawdown or nomination strategy.
For deaths before that date the current rules apply, and the change is not retrospective.
Assuming every pension is outside the estate and leaving them off the form.
A few pensions can be inside it — a guaranteed payment period still running, certain annuities, or a lump sum the person had already become entitled to before death — and IHT409 is where each arrangement has to be listed so HMRC can confirm the treatment.
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Where this fits
IHT409 is one form. The file behind it is the rest.
Forms are easier when the records are ready.
For IHT409, that means a list of every pension the person held — workplace, personal, SIPP and any annuity — the scheme administrator's contact details, the date-of-death value of each fund, the expression-of-wishes (nomination) forms, and a letter from each scheme confirming whether the death benefits are held at the trustees' discretion.
When you're ready — not before — our £179 Executor's First Hour walks you through registering the death, notifying banks and pensions, and getting probate started, in the right order. The free checklist above covers the essentials; this is for when you'd rather have a hand to hold. Executor's First Hour — £179 →
HM Revenue & Customs (HMRC)·32 fields·No separate fee — supplementary schedule filed with IHT400·30 minutes (with pension details already recorded in the vault) with Valoren
The return this attaches to
This is one schedule. It attaches to the IHT400 — the main Inheritance Tax account — which is where every schedule you complete comes together.
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