The House of Lords Finance Bill Sub-Committee has launched an inquiry into the Draft Finance Bill 2025–26, including plans to bring unused pension funds and death benefits into the scope of inheritance tax (IHT).

The Finance Bill Sub-Committee was appointed by the Economic Affairs Committee to consider the draft bill with a specific focus on tax administration, clarification, and simplification.

As part of this, the committtee has said that it is looking to hear from taxpayers, their advisers, relevant organisations, and any other interested parties on the plans. The deadline for responses is 7 October 2025.

Sub-Committee chair, Lord Liddle, said: "In its draft Finance Bill, the government is proposing a measure to bring unused pension funds and death benefits into the scope of Inheritance Tax. It is also making significant changes to agricultural property and business property reliefs.

"The Finance Bill Sub-Committee's work does not look at the rates of tax proposed by the government. Instead, it makes recommendations on how the government’s tax policy can best be implemented and administered.

"These are important changes. To inform our work we want to hear from as broad a range of people and organisations as possible. If you have a view on any aspect of these proposals, please let us know what you think."

The government recently confirmed that it would be moving ahead with plans to bring pensions into the scope of IHT, as announced in the 2024 Autumn Budget, although it made changes in response to industry feedback.

However, the pensions industry has warned that there are "still issues to iron out", with specific calls for further clarity on exactly when death in service lump sums will be excluded from scope of IHT, and on some practical implementation areas.

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