Pension Inheritance Tax Calculator 2027
From 6 April 2027, unused UK pension pots count toward your estate for inheritance tax at 40%. Compare your IHT bill under today's rules with the bill under the new rules — and see exactly how much extra tax the change could cost your family.
Not financial advice. This is a simplified model of a complex, still-evolving tax change. Do not move pension money or rewrite your will based on it — speak to an FCA-regulated financial adviser, or start with free guidance from MoneyHelper.
How to use this calculator
- Gather your figuresYou'll need your total estate value excluding pensions (property, savings, investments), the value of your unused pension pots, your home's value, and any large gifts made in the last 7 years.
- Enter them aboveFill in the form and set the two toggles: whether you're married or in a civil partnership, and whether your home passes to direct descendants (children or grandchildren).
- Read the comparisonThe calculator shows your IHT bill under today's rules, your bill from 6 April 2027 when unused pensions join the estate, and the difference — the extra tax the rule change creates.
Compare your IHT: now vs April 2027
Property, savings, investments — everything except pension pots.
Unused defined-contribution pots, SIPPs and drawdown balances.
Gifts above the £3,000 annual exemption. Leave blank for 0.
Leave blank for 0 if you don't own a home.
Pensions and inheritance tax questions
Will my pension be taxed for inheritance tax from 2027?
From 6 April 2027, most unused defined-contribution pension pots and lump-sum death benefits count toward your estate for inheritance tax, charged at 40% above your available allowances. Today they usually sit outside the estate and pass tax-free. Use the calculator above to see the difference for your own figures.
How much inheritance tax will I pay on my pension?
It depends on your total estate — including the pension from 2027 — measured against the £325,000 nil-rate band plus up to £175,000 residence nil-rate band. Every pound above your allowances is taxed at 40%. A £400,000 pension on top of a £500,000 estate, for example, adds £160,000 of IHT where the allowances are already used.
Are pensions passed to a spouse still exempt?
Yes. The spouse and civil-partner exemption is maintained, and unused allowances still transfer to the survivor. The 2027 charge typically lands on the second death, when wealth passes to children or other beneficiaries.
What about pensions I am already drawing down?
Unused funds count — including AVCs and unpaid drawdown balances. Death-in-service lump sums from registered schemes and dependants' scheme pensions stay outside the charge.
What if I die before 6 April 2027?
The current rules apply: unused defined-contribution pensions generally sit outside your estate for inheritance tax. The change applies to deaths on or after 6 April 2027.
Could my beneficiaries pay income tax too?
Possibly. If you die at 75 or older, beneficiaries can face income tax at their own marginal rate when they draw the inherited pension — in addition to any inheritance tax. This double charge is one reason the 2027 change is controversial. This calculator covers the IHT side only.
Related calculators
Sources & official guidance
Estimate only — not legal or financial advice. Rules: current legislation plus the announced 6 April 2027 pension change (secondary regulations still landing). See our disclaimer.