- days to April 2027◆Finance Act 2026 takes effect 6 April 2027◆BPR qualifying period is 2 years · act now to start the clock◆Finance Act 2026 · Royal Assent 20 March 2026. April 2027 is now less than 12 months away. For clients over 75, income tax on death benefits can be eliminated from the day of transfer. The 2-year BPR clock starts immediately.◆- days to April 2027◆Finance Act 2026 takes effect 6 April 2027◆BPR qualifying period is 2 years · act now to start the clock◆Finance Act 2026 · Royal Assent 20 March 2026. April 2027 is now less than 12 months away. For clients over 75, income tax on death benefits can be eliminated from the day of transfer. The 2-year BPR clock starts immediately.◆
Finance Act 2026 · Why this matters now

The 2026 Pension and Inheritance Tax Changes - What They Mean for Your Tax-Free Income

Recent changes to pension and Inheritance Tax legislation have made estate and retirement planning more important than ever. Understanding these changes is essential, as they will influence how you can continue to generate tax-free income, whether through a pension-based solution or a non-pension (plain annuity) arrangement.

80%
Combined IHT + income tax on pension death benefits for over-75s can reach up to 80% from April 2027 (typically around 67%)
£2.5m
100% Business Relief allowance from 6 April 2026 (50% on the excess)
2 yrs
Business Relief qualifying period - the clock starts on transfer

What has changed

✓
Pensions enter the IHT estate from April 2027 - Finance Act 2026 (Royal Assent 20 March 2026) brings unused defined contribution pension funds into the inheritance tax estate for the first time. For clients over 75, IHT at 40% stacks with income tax on death benefits - a combined charge that can reach up to 80%, and typically around 67%.
✓
Business Relief was reformed from 6 April 2026 - From 6 April 2026, 100% Business Relief applies to the first £2.5m of qualifying assets, with 50% relief on the excess. Structures that qualify for BPR - held for the two-year period - remain a powerful route to mitigate IHT.
✓
The window is closing - April 2027 is now less than 12 months away, and the two-year BPR qualifying clock only starts on transfer. Planning started today is planning that qualifies in time.

Where Is Your Wealth Held?

The right solution starts with a simple question: where is your capital today?

Whether your wealth is held inside a pension or outside of one, it may be possible to create a tax-efficient income stream while improving the position for your beneficiaries.

Pension Wealth
Lifetime Pension Income Service
Delivered through the Flexible Pension Annuity

Your capital is held within a pension (SIPP or workplace scheme).

  • Create income for life.
  • Mitigate the impact of the 2027 pension IHT changes.
  • Potentially reduce tax on death.
  • Preserve more family wealth.
Explore the Lifetime Pension Income Service →
Non-Pension Wealth
Lifetime Private Income Service
Delivered through the Flexible Life Annuity

Your capital is held outside a pension, such as savings, investments or business sale proceeds.

  • Create income for life.
  • Benefit from tax-efficient income treatment.
  • Improve the value passed to future generations.
  • Preserve more family wealth.
Explore the Lifetime Private Income Service →

For professional adviser use only. Not for client distribution. Figures are illustrative and depend on individual circumstances. Business Relief is assessed by HMRC on death and is not guaranteed. Appropriate independent financial advice should be taken before any decision is made.

Regulatory Information

Provided through [Firm Name], authorised and regulated by the FCA (No. [FCA No.]). Products are issued by the relevant provider; the Flexible Life Annuity is issued by [Provider], regulated by the Gibraltar Financial Services Commission (Permission No. [GFSC Permission No.]).

Illustrative Only

For professional adviser use only. Not for client distribution. All figures are illustrative and depend on individual circumstances. Business Relief is assessed by HMRC on death and is not guaranteed. Appropriate independent financial advice should be taken before any recommendation is made.