Updated 4 September 2026. This article concerns the planned United Kingdom Inheritance Tax treatment of unused pension funds and pension death benefits for deaths on or after 6 April 2027. It is a legal information guide, not a personal tax calculation. The result depends on the pension scheme, the member’s age, the beneficiary, residence history, the France–UK conventions and the documents available.

For many Britons who have settled in France, a pension has been treated as the asset to spend last. That approach is now due for a fundamental review. From 6 April 2027, most unused pension funds and pension death benefits will enter the deceased member’s estate for United Kingdom Inheritance Tax purposes. A French address does not, by itself, remove a British pension from the analysis. At the same time, the reform does not mean that every British resident in France will automatically pay UK tax on every pension, or that withdrawing the whole fund before the effective date is necessarily sensible.

The difficult question is cross-border classification. A continuing survivor’s pension, a lump-sum death benefit, a defined-benefit dependant’s pension and an amount paid to personal representatives do not necessarily follow the same rules. The United Kingdom may apply one tax regime, while France examines the payment under French income-tax or succession rules. The 1963 France–UK convention on death duties also has to be separated from the later income-tax convention. This guide sets out what changes, why French residence and long-term UK residence must be tested separately, how double taxation relief may operate, and which documents a family should assemble before a provider or tax authority asks for them.

I. Will my UK pension be caught by Inheritance Tax if I live in France?

A. What changes on 6 April 2027, and which pension interests count?

The starting point is the date of death, not the date on which a pension was opened or the date on which the member moved to France. The United Kingdom Government’s technical note on Inheritance Tax and pensions says that, for deaths on or after 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of the deceased person’s estate. The measure was enacted through the Finance Act 2026, which amends the Inheritance Tax Act 1984 and related legislation. The date should be recorded in every planning file because a death before 6 April 2027 is tested under the rules applicable at that time, while a death on or after that date is tested under the new framework.

The new concept is often described as a pension being “in the estate”. More precisely, the legislation treats specified pension interests as notional pension property for the Inheritance Tax computation. That does not necessarily mean that the pension provider transfers the fund to the executor, or that the nominated beneficiary loses the contractual right to receive it. It means that the value can be included when the taxable estate is calculated. The distinction matters because the person who receives the money and the person responsible for reporting and paying the tax may be different.

The most obvious affected arrangement is an unspent defined-contribution pension. This is a pension pot invested for the member, from which withdrawals may be made over time and which may produce a lump-sum death benefit when the member dies. The reform is wider than that example. It can also cover other registered pension-scheme interests and qualifying non-UK arrangements, subject to the statutory definitions and exclusions. A scheme statement that uses the word “drawdown”, “flexi-access”, “uncrystallised funds” or “death benefit” is not enough to decide the outcome. The complete rules and the provider’s calculation must be obtained.

The official policy detail on unused pension funds and death benefits identifies important exclusions. Death-in-service benefits from a registered pension scheme are excluded in the circumstances described by the measure. The policy also excludes dependants’ scheme pensions from defined-benefit and collective money-purchase schemes in the specified cases. Continuing annuities and certain smaller or exempt benefits have their own treatment. These exclusions are not a general exemption for everything called a survivor’s pension. The exact scheme type, the relationship with the member and the terms of the benefit still have to be checked.

Transfers to a surviving spouse or civil partner may also benefit from the relevant United Kingdom exemption. “Civil partner” here means a person whose relationship has been legally registered under the applicable civil-partnership law; it is not simply a person who lives with the deceased. The exemption does not make the pension irrelevant. The value may still need to be reported, the beneficiary’s later death may raise a second question, and the French position may use a different legal classification. The family should therefore preserve the evidence of the relationship and the payment route, rather than assume that a provider’s reference to “spouse exemption” closes the file.

The personal representatives, meaning the executors or administrators handling the estate, are central to the new reporting system. The Government’s proposal places the reporting and payment responsibility for Inheritance Tax on the personal representatives, with information to be obtained from pension scheme administrators and shared among the parties. A scheme administrator may have to provide a value even where the benefit is paid outside the estate. The personal representatives may need to ask for an estimate if the final value is not available within the relevant period and update the position when the final amount arrives.

The payment mechanism is particularly important for a family living in France. The policy allows personal representatives, in the circumstances specified by the legislation, to direct a pension scheme administrator to withhold up to 50% of taxable benefits for up to 15 months after the end of the month of death and pay the relevant Inheritance Tax before releasing the balance. That is a cash-flow safeguard for HM Revenue and Customs, not a rule that 50% of every pension is automatically lost. The amount retained depends on the tax due and the statutory notice. A beneficiary should ask whether a withholding notice was issued, its date, the amount retained and whether any excess will be released.

The policy documents also deal with a pension discovered after clearance of the estate. Personal representatives may be discharged in some circumstances after HMRC clearance, but the later discovery of another pension can create a separate liability route. A family should not destroy old provider correspondence merely because the estate has already been closed. Keep statements, nomination records and transfer documents for as long as a later-discovered pension or an information request remains possible.

The phrase “I live in France” is therefore only one fact in the UK analysis. Ask six separate questions:

1. What type of pension or scheme is involved?
2. What was the member’s age at death?
3. Was the benefit an unused fund, a continuing pension, a death-in-service payment or another statutory category?
4. Who was contractually entitled to the payment: a nominee, dependant, spouse, civil partner, child or estate?
5. Was the member within the United Kingdom’s long-term-residence rules at the date of death?
6. What does the France–UK succession convention do with the particular asset and the particular domicile facts?

These questions prevent a common error: using the annual income-tax treatment of a UK pension to answer an Inheritance Tax question. A British pension may be taxable in France as income while the unspent value is also relevant to the United Kingdom’s estate computation on death. The later beneficiary payment may raise a further income-tax issue in France or the UK. “Tax-free pension” is never a sufficient description for a cross-border succession file.

B. Why does French residence not by itself remove the United Kingdom charge?

The United Kingdom replaced the old domicile-based approach for many Inheritance Tax residence questions with a long-term UK residence test from 6 April 2025. The current GOV.UK guidance on long-term UK residents explains that a person is generally a long-term UK resident if they have been UK tax resident for ten consecutive years or for ten of the preceding twenty tax years. After departure, the status can continue for a period of between three and ten tax years, depending on the person’s residence history. The calculation is technical: the move to France, a short return to the UK and the tax years counted before departure can all matter.

This produces several different profiles. A person who has lived in France for many years and has no continuing UK long-term-residence status may have a narrower UK estate exposure than a recent emigrant. A person who moved to France recently after a long UK residence history may remain within the UK worldwide-asset rules for the relevant tail period. A person who is resident in France but returns to the UK or keeps a UK tax-residence pattern may need a fresh calculation. Nationality is not the decisive test. A British passport does not automatically create worldwide UK Inheritance Tax, and French residence does not automatically extinguish it.

There is a second layer: the asset’s statutory location. The Government’s guidance on Inheritance Tax when someone living outside the UK dies distinguishes UK-situated assets from overseas assets, while the pension reform creates specific rules for registered and qualifying non-UK pension arrangements. For a long-term UK resident, the overseas-pension analysis may be wider than for a person who is not long-term resident. It is unsafe to infer the answer from the place where the pension provider is incorporated or from the currency in which the pension is paid.

Then comes the France–UK succession convention. The official 1963 convention on estate and death duties predates the 2027 pension reform. It does not simply say that the country where the beneficiary lives collects the tax. It uses concepts of domicile and asset location to allocate taxing rights and provides mechanisms for relief. HMRC’s current manual on the France–UK Inheritance Tax convention explains, among other points, that the evidence needed for a French clearance certificate or a UK credit claim depends on which state is treated as the deceased’s domicile and which assets are in issue.

The old treaty language must be read alongside the new UK domestic residence rules, not silently rewritten. The United Kingdom’s long-term-residence test may bring a pension into the domestic computation; the convention may then limit the United Kingdom’s right to tax a particular asset because of the deceased’s treaty domicile and the asset’s deemed location. A domestic charge and a final treaty liability are not always the same thing. A personal representative should calculate the domestic position first, then apply the convention and document why the treaty conclusion follows.

France also has its own domestic connecting rules. “Droits de mutation à titre gratuit” means French gift and inheritance tax. Article 750 ter of the French General Tax Code begins with the words Sont soumis aux droits de mutation à titre gratuit, meaning that assets are subject to these taxes in the situations defined by the article. It can connect the tax to the deceased’s French tax domicile, to assets situated in France and, where the beneficiary has been resident in France for at least six of the preceding ten years, to assets received from abroad. The convention may modify the result, but French residence history remains a fact that must be proved.

French tax rates and allowances are also relationship-sensitive. Article 777 of the General Tax Code states: Les droits de mutation à titre gratuit sont fixés aux taux indiqués dans les tableaux ci-après. In other words, the rates apply to the net share received by each person. Article 779 provides allowances and says, in the relevant provision, il est effectué un abattement de 100 000 €, meaning that a €100,000 allowance is applied in the circumstances covered by the article. Article 796-0 bis provides that the surviving spouse and the civil partner bound by a French pacte civil de solidarité, or PACS, are exempt from French death-transfer tax; the article begins, Sont exonérés de droits de mutation par décès le conjoint survivant. A PACS is a formal French civil-solidarity partnership; it is not automatically identical to every UK relationship status. These provisions show why “my heir lives in France” cannot be converted into a reliable tax figure without knowing who inherits and under what legal route.

The French and UK charges can also arise at different moments. A UK Inheritance Tax calculation may be made on the deceased’s estate, while a French tax office may examine the legal nature of what the beneficiary received. A payment can be included in the UK estate even if it passes directly to a nominee. Conversely, a payment that a provider describes as a pension may need French income reporting rather than a succession declaration. The treaty analysis therefore requires a payment map, not just a list of bank accounts.

Do not overlook the difference between the State Pension and a private or occupational pension pot. The 2027 measure concerns unused pension funds and death benefits within its statutory scope. The ordinary UK State Pension is a state benefit paid during life and does not become an inheritable invested fund in the same way as a defined-contribution pot. A surviving spouse may have a separate entitlement under the State Pension rules, but that entitlement should not be described as the deceased’s unspent pension fund without checking the applicable scheme rules.

The safest conclusion is conditional: French residence can be highly relevant to the treaty, French succession tax and the beneficiary’s reporting, but it is not a standalone exemption from the UK domestic pension rules. The family must establish UK long-term-residence status, treaty domicile, pension type, benefit type, beneficiary status and asset location before deciding whether there is a final UK charge.

II. How can my heirs and I reduce a cross-border tax and probate shock?

A. What do the France–UK treaty and French succession rules actually do?

The treaty does not function as a universal “no double tax” button. Its purpose is to allocate taxing rights or provide a credit when both domestic systems would otherwise charge. The United Kingdom’s official Inheritance Tax double-taxation guidance explains that relief is normally limited to tax actually paid on the same asset and that the relief cannot exceed the tax attributable to that asset in the state granting the credit. The 1963 France–UK convention must be read with its domicile and situs provisions. A family should therefore ask which country has the primary right, whether the other country can also charge, and which country’s procedure must be used first.

For a deceased person treated as domiciled in France for the convention, the United Kingdom may not have the same worldwide claim that its domestic long-term-residence rules would suggest. For a deceased person treated as domiciled in the United Kingdom, the treaty may allocate particular French assets or other rights differently, and France may still calculate a charge under its domestic law before granting relief. HMRC’s France–UK convention guidance refers to a French declaration of succession and a French clearance certificate in some claims, while a UK-domiciled estate seeking credit may use the UK estate-return process and supporting French evidence. The exact documents depend on the facts.

On the French side, Article 784 A of the General Tax Code provides a domestic credit rule in the cases defined by Article 750 ter. Its wording says that le montant des droits de mutation à titre gratuit acquitté, le cas échéant, hors de France est imputable; in English, succession or gift tax paid outside France may be credited in the situations covered by the Code. The article limits the credit to the tax paid on movable and immovable property situated outside France. That limitation is important. A foreign tax payment on one pension or asset cannot automatically be set against every item in the French succession computation.

There may be a further difficulty where one country sees a pension payment and the other sees a succession asset. The legal bases are not identical. Income tax charged on the beneficiary’s receipt is not necessarily the same tax as Inheritance Tax charged on the deceased’s estate. A credit may be available only if the relevant treaty or domestic provision treats the charges as comparable and relates them to the same property. The family should list the tax name, tax base, taxpayer, taxable event and payment date in both countries. If one of those columns does not match, the double-tax argument needs closer analysis.

French succession law may also affect the destination of the money. “Réserve héréditaire” means the protected share of an estate that French law reserves for certain children. Article 912 of the Civil Code defines it as La réserve héréditaire est la part des biens et droits successoraux protected by law for certain heirs. The remaining portion is the quotité disponible, meaning the part that can be freely given away within the legal limits. Article 913 of the Civil Code sets out the limits according to the number of children and states, in its opening rule, Les libéralités, soit par actes entre vifs, soit par testament, ne pourront excéder la moitié des biens du disposant. These rules may matter to a French estate even where the pension provider pays outside the estate, because the family must distinguish a contractual benefit from a succession asset and assess any claim under the applicable law.

A will is not a substitute for a pension nomination. The pension contract, scheme rules and beneficiary clause may determine who receives a death benefit; a will may govern other assets or may express a choice of succession law where the relevant international rules permit it. The two documents should tell the same family story. If the will leaves the pension to one child but the pension nomination names another person, the conflict should be resolved before death if possible. A nomination marked “expression of wish” may be discretionary rather than binding, while a nomination accepted under the scheme rules may have a different effect.

French case law on insurance benefits illustrates this point without deciding the treatment of every UK pension. In Cour de cassation, First Civil Chamber, 5 November 2008, no. 07-14.598, the Court considered a beneficiary who died before accepting an assurance-vie, meaning a French life-insurance contract. It held, on the facts, that les capitaux garantis ne pouvaient entrer dans l’actif de la communauté, or that the guaranteed capital could not enter the community assets. The decision also examined the presence of other beneficiaries of the same rank. It is not a ruling that a British pension is French life insurance. Its value is methodological: the original clause, acceptance and competing beneficiaries matter.

In Cour de cassation, First Civil Chamber, 19 September 2018, no. 17-23.568, the Court dealt with heirs named as beneficiaries under an insurance contract and required the lower court to investigate the subscriber’s intention regarding the distribution of the guaranteed capital. The decision records the rule that les héritiers, ainsi désignés, ont droit au bénéfice de l’assurance en proportion de leurs parts héréditaires, subject to the legal context of that contract. Again, this is an insurance precedent, not an automatic rule for a UK pension. It shows why an executor should obtain the actual pension nomination and not rely on a family member’s recollection.

In Cour de cassation, Commercial Chamber, 11 October 2023, no. 21-12.732, the Court examined the French tax treatment of premiums paid after age 70 under a life-insurance contract and referred to the absence of double taxation in its reasoning. This judgment concerns a French assurance-vie arrangement and Article 757 B of the General Tax Code, not the 2027 British pension reform. It is included as a boundary marker: a French tax result depends on the product and the statutory tax event. The decision cannot be used to label a defined-contribution pension without reading the UK scheme.

The practical treaty matrix should therefore have at least these rows:

Question	Evidence to collect	Why it matters
Where was the deceased treaty-domiciled?	Residence history, homes, family and tax records	It may allocate worldwide or limited taxing rights
What is the pension interest?	Scheme rules, provider statement and benefit calculation	It distinguishes an unused fund, death benefit, annuity or dependant’s pension
Who is entitled?	Nomination, expression of wish, will, probate and relationship evidence	It affects exemptions, reporting and any family claim
Where is the asset treated as situated?	Scheme jurisdiction, contract terms and treaty analysis	It affects the country with the primary taxing right
What tax has actually been paid?	UK and French assessments, certificates and payment proofs	It determines whether a credit or repayment can be claimed

This table is more reliable than a headline statement that France and the UK have a “double-tax treaty”. The treaty does not decide who inherits the pension, and a French notary’s succession declaration does not decide what the UK pension provider owes under its scheme. Each institution answers a different question. The family’s objective is to make the answers consistent before a filing deadline forces a choice.

B. What should I prepare now: pension files, nominations, tax evidence and family instructions?

The first preparation step is an inventory of every UK pension, not only the largest one. List the provider, scheme name, policy number, employer, country of administration, current value, crystallised and uncrystallised parts, drawdown status, annuity status, beneficiary form, expression-of-wish date and contact route. Include older schemes that have been transferred, preserved or forgotten. A short statement showing a zero balance at one date does not prove that the contract has ended. Ask the provider whether any residual death benefit, guarantee period or dependant’s pension remains.

The second step is a residence timeline. Record every UK and French tax year, the move date, days spent in each country, homes available, work or business activity, spouse and children’s main home, and any return to the UK. Keep tax-residence certificates and copies of returns. A person’s everyday description of being “based in France” does not necessarily answer the United Kingdom’s ten-year or ten-out-of-twenty-year test, nor the treaty tie-breaker. The timeline should be updated annually because the long-term-residence tail can expire or be extended by a later UK residence year.

The third step is to review the beneficiary nomination. Ask the provider whether it is binding, discretionary or an expression of wish. Check whether a marriage, divorce, civil partnership, separation, birth, death or change in family relationship makes the form inaccurate. Confirm whether the nomination is held on the provider’s system and request a dated copy. A will should identify the existence of the pension without assuming that it controls the provider’s distribution. If the family’s plan depends on a spouse exemption, verify that the legal relationship satisfies the relevant UK and French rules.

The fourth step is to model withdrawal decisions in both countries. A premature lump-sum withdrawal may reduce an unused fund but create French income tax, social charges, exchange-rate exposure, investment risk or a gift-tax issue if the money is then given to children. It may also change the person’s annual income and affect means-tested or contribution-based arrangements. On the other hand, preserving every pound until death may produce a larger UK estate exposure after 6 April 2027. The comparison should show at least three scenarios: continuing the present withdrawals, accelerating withdrawals gradually and taking a larger capital payment. The model must state assumptions; it should not present a single figure as a guaranteed saving.

The fifth step is to check whether a transfer to an overseas pension arrangement is legally and financially appropriate. A Qualifying Recognised Overseas Pension Scheme, or QROPS, is a foreign pension arrangement recognised for certain UK transfer purposes. It is not a magic route out of taxation. The transfer can have its own UK charge, reporting requirements, investment restrictions and French consequences. The scheme’s jurisdiction, the date of transfer, the member’s residence and the destination product must all be tested. Do not transfer a pension simply because an article or provider advertises the word “offshore”.

The sixth step is to obtain the documents that personal representatives will need after death. Create a secure folder containing the death certificate instructions, pension list, provider contacts, nominations, will, power of attorney information, residence timeline, tax returns, treaty evidence and a letter explaining where the original documents are held. Tell the executors that the pension providers must be contacted promptly. A family in France should identify who can communicate with a UK provider in English, who can work with a French notaire, meaning a French civil-law notary, and who can coordinate the tax timetable.

The seventh step is to separate the legal roles. A financial adviser may model investment and withdrawal consequences. A UK tax adviser may calculate the United Kingdom estate charge. A French tax adviser may classify the receipt and prepare French declarations. A lawyer can analyse the treaty, succession rights, the nomination dispute and any challenge to an assessment. A notary may handle the French succession formalities. One professional’s answer should not be copied into another country’s return without checking the legal basis.

The eighth step is to plan for liquidity. Inheritance Tax can be due even when the pension remains invested or when the beneficiary cannot access the whole fund immediately. A French property, a UK home and an illiquid pension can leave the personal representatives with a tax bill but little cash. The family should identify liquid assets, insurance, authorised borrowing and the provider’s withholding process. If a scheme administrator withholds up to 50% under the statutory mechanism, the file should record whether that amount is a provisional payment, how it will be reconciled and who bears any remaining tax.

The ninth step is to prepare for a wrong classification. If a provider calls a payment a taxable lump sum, request the rule, calculation and age-based reason. If the UK authority includes the pension in the estate, request the statutory basis and valuation date. If the French tax office treats the receipt as income, ask which form and article it has applied. If the office treats it as a succession asset, ask how Article 750 ter and the treaty were applied. The response should be written, dated and supported by the scheme terms. A telephone explanation is useful for understanding the issue, but it is not a substitute for a record.

Two official French guides are useful checks on the domestic starting point. The French tax administration’s explanation of taxable inherited assets distinguishes assets situated in France from the worldwide-assets rule that can apply after six years of French residence in the preceding ten. Service-Public’s guide to inheritance-tax exemptions sets out relationship-based exemptions and reminds the reader that international conventions can change the domestic result. These pages do not classify a UK pension for every case, but they are safer starting points than an informal translation of a provider’s letter.

French payment deadlines also need attention. Article 1701 of the General Tax Code states that death-transfer duties are paid before the relevant act is executed and provides that Nul ne peut en atténuer ni différer le paiement, meaning that no one may reduce or defer payment outside the legal mechanisms. This does not eliminate the possibility of an authorised instalment or a treaty claim; it does mean that a beneficiary should not wait for the UK provider to resolve every issue before checking the French deadline. Ask the notary or tax office what filing is required and make a protective filing or claim where the procedure permits it.

Late payment can have a cost. Article 1727 of the General Tax Code states that a tax debt not paid within the legal period donne lieu au versement d’un intérêt de retard, meaning that late-payment interest is due. The rate, starting date, exemptions and calculation must be checked for the particular declaration. A family should not assume that a pending UK treaty question suspends a French deadline, or that a French claim automatically stops a UK payment notice.

When asking for a treaty credit or repayment, use a document bundle with an index. Include the deceased’s death certificate, will and grant or equivalent probate document; the pension rules and nomination; the provider’s valuation; the member’s age; the beneficiary’s identity and residence; the UK estate computation; the French succession or income-tax computation; payment evidence; and the legal explanation of the treaty article. Mark each document as original, certified copy or translation. If the United Kingdom or France requests a certificate, obtain the current form from the relevant administration rather than reusing an old template.

Translations should be precise. “Inheritance Tax”, “droits de mutation à titre gratuit”, “estate”, “succession”, “pension”, “death benefit” and “assurance-vie” do not always have identical legal boundaries. If an English provider letter says “beneficiary”, the French file should state whether that means a contractual beneficiary, an heir, a legatee or a nominee. If a French document says héritier réservataire, explain that it means a reserved heir protected by French succession law. Clear terminology makes it less likely that a tax office will apply the wrong form because the family used a familiar but inaccurate translation.

Finally, give the family written instructions for the first 30 days after death. The instructions should say who reports the death, who requests the provider’s valuation, who freezes or secures online access, who contacts the French notary, who checks the UK long-term-residence timeline and who records every deadline. They should warn the family not to accept a distribution, sign a release or transfer the money to another relative before the tax and succession consequences are reviewed. A beneficiary’s acceptance, waiver or gift may change the legal position and cannot always be undone.

The British Desk’s separate guide on voluntary National Insurance and the UK State Pension after moving to France addresses contributions and retirement entitlement. It does not replace this estate-focused review. The annual pension-income question, the beneficiary’s death-benefit question and the deceased’s Inheritance Tax question should be kept in three linked but separate files.

Conclusion

From 6 April 2027, most unused pension funds and pension death benefits within the statutory scope are due to enter the United Kingdom Inheritance Tax computation. For a British resident in France, the result cannot be answered by residence, nationality or the provider’s label alone. The decisive facts include the date of death, pension type, member’s age, benefit route, beneficiary relationship, UK long-term-residence history, treaty domicile, asset location and French tax classification.

The sensible preparation is documentary and comparative. Obtain the full scheme rules and nomination history, build a residence timeline, identify the person entitled to the benefit, map the 1963 France–UK succession convention against both domestic systems, and model withdrawal or preservation choices with their French and UK consequences. Keep the UK estate calculation separate from the French income or succession declaration, then use the applicable relief procedure with evidence of tax actually paid. If a provider or tax authority has used the wrong category, request its reasoning and challenge the specific assessment with the documents that prove the payment’s legal character.

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