SSAS and Inheritance Tax: 2026/27 Rules + the April 2027 Change

By Mike Holt, Operations Director, Holtram TLPI Ltd · HMRC-registered SSAS scheme administrator (HMRC ref A0140182). Established 2003

Last updated: June 2026 · 11 min read · UK 2026/27 tax year

The current position (until 5 April 2027)

Under current UK pension law, undrawn SSAS funds pass to nominated beneficiaries outside the estate for Inheritance Tax purposes. This applies whether the member dies before or after age 75. The mechanics:

• The member completes a beneficiary nomination form (sometimes called an “expression of wish”) held by the scheme administrator.
• On death, the scheme administrator pays the death benefit to the nominated beneficiary or beneficiaries.
• The payment sits outside the estate — meaning it doesn’t use up the £325,000 nil-rate band or attract IHT at 40%.
• The beneficiary can usually choose to take the funds as a lump sum or as a continuing pension (beneficiary’s drawdown), which itself can be passed to a successor beneficiary.

This is a substantial planning advantage. For a director with a £1,000,000 SSAS, current rules mean the entire fund can pass to family without IHT — equivalent to a saving of up to £400,000 of IHT versus holding the same wealth outside a pension.

What changes from 6 April 2027

The Autumn 2024 Budget announced that, from 6 April 2027, undrawn pension assets — including SSAS funds — will be brought into the deceased member’s estate for Inheritance Tax purposes. The full technical detail is still being finalised in subsequent Finance Bills, but the headline position is clear:

• Undrawn SSAS funds will be added to the deceased member’s estate at the date of death.
• The combined estate will be subject to IHT at 40% above the available nil-rate band(s).
• Existing IHT reliefs (spouse exemption, charity exemption, residence nil-rate band, business relief) continue to apply to the overall estate.
• The mechanics of paying the IHT may flow through the pension administrator before paying out to beneficiaries (the consultation responses are pending at the time of writing).

This is the largest change to UK pension IHT treatment in over 15 years. For directors with substantial SSAS funds, it makes the period between now and April 2027 a planning window worth using.

The age 75 income tax thresholds (separate from IHT)

The IHT treatment above is separate from the income tax treatment of beneficiary withdrawals. The age-75 threshold under existing rules is unchanged:

• If the member dies before age 75: Beneficiaries can take the SSAS funds free of income tax (subject to the Lump Sum and Death Benefit Allowance, currently £1,073,100).
• If the member dies after age 75: Beneficiary withdrawals are taxable at the beneficiary’s marginal income tax rate.

From April 2027 the new IHT regime sits on top of these income-tax rules — meaning the same SSAS fund could be subject to both IHT (at the member’s death) and income tax (on the beneficiary’s subsequent withdrawal). The combined effective tax could exceed 60% in some scenarios.

What directors should consider between now and April 2027

Without giving advice (this page is educational; consult an FCA-regulated adviser for personal recommendations), some planning angles being discussed in the trade press include:

• Reviewing beneficiary nominations in light of the post-2027 estate inclusion — particularly where the planned beneficiary already has IHT exposure.
• Crystallisation strategy — whether to take more from the SSAS during lifetime (e.g., tax-free lump sum at 55+) and use it for inter-vivos gifting (which falls outside the estate after 7 years).
• Spouse-direction nominations — payments to a spouse remain IHT-exempt under spouse exemption.
• Business relief on SSAS-held shares — consideration of whether SSAS-held assets qualify for IHT business relief (complex; depends on the asset).

SSAS-specific nomination considerations

Because SSAS schemes can have up to 11 members and Family SSAS schemes can span generations, the nomination structure is more flexible than a personal pension. Common SSAS nomination patterns:

1. Spouse first, children as default: Standard for owner-managed company SSAS schemes.
2. Discretionary nomination to a class: “Any of my children or grandchildren as the trustees see fit” — gives the surviving trustees flexibility post-death.
3. Family SSAS continuation: Funds remain in the existing SSAS as beneficiary’s drawdown for the next generation, preserving the scheme’s tax-advantaged growth.

All beneficiary nominations should be reviewed before the April 2027 change. The scheme administrator can confirm the current nomination on file.

Frequently asked questions

Are SSAS pensions free of Inheritance Tax?

Until 5 April 2027, yes — undrawn SSAS funds sit outside the estate for IHT. From 6 April 2027, undrawn pension funds (including SSAS) will be brought into the deceased member's estate for IHT per the Autumn 2024 Budget.

What's changing in April 2027?

Undrawn pension assets will be added to the deceased member's estate for IHT purposes. The combined estate is then taxed at 40% above the available nil-rate band(s). The income-tax treatment of beneficiary withdrawals (pre-75 vs post-75) is separate and unchanged.

If I die before 75, do my SSAS beneficiaries pay any tax?

Under current rules, no — beneficiaries can take the funds free of both Inheritance Tax and income tax (subject to the Lump Sum and Death Benefit Allowance). After April 2027, IHT will apply but the pre-75 income-tax exemption on beneficiary withdrawals remains.

What happens to my SSAS if I die after 75?

Beneficiaries pay income tax at their marginal rate on any withdrawals. Under current rules the fund itself is outside the estate for IHT; from April 2027 it will also be subject to IHT.

Can my SSAS pass to my children directly?

Yes, via beneficiary nomination. You complete a nomination form (held by the scheme administrator) naming the children. On death the administrator pays the funds directly to the named beneficiaries.

Will the spouse exemption still apply after April 2027?

Yes. Payments from an estate to a spouse or civil partner remain IHT-exempt under spouse exemption. A surviving-spouse beneficiary nomination is one route to manage the 2027 change.

Should I take more from my SSAS now before April 2027?

This is a personal-circumstances question requiring FCA-regulated advice. The trade-off involves losing future tax-free growth, current income tax on withdrawals, and the post-7-year gifting rules. Consult an IFA.

Is the April 2027 IHT change definitely happening?

Yes — it was announced in the Autumn 2024 Budget and is being legislated in subsequent Finance Bills. The detailed mechanics are still being finalised through the consultation process.

Sources & references

• HMRC: PTM070000 — Death benefits
• HM Treasury: Autumn Budget 2024 — Pensions in the IHT regime
• HMRC: Inheritance Tax Manual
• HMRC: PTM170000 — Lump sum allowance regime (2024-)

Disclaimer: This article is for educational purposes only and does not constitute financial advice. SSAS pensions are corporate occupational pension schemes registered with HMRC and overseen by The Pensions Regulator (TPR); they do not fall under FCA regulation. For personalised advice, consult a separately FCA-authorised independent financial adviser.