Registered Group Life, Inheritance Tax and the continuing road to April 2027

On 15 July 2026, the government laid the Registered Pension Scheme (Provision of Information) (Miscellaneous Amendments) Regulations 2026, setting out the information that pension scheme administrators, personal representatives and beneficiaries must provide following the death of a pension scheme member.

The regulations establish the reporting framework that will apply after a member's death and, importantly for the group risk market, do not include the previously proposed requirement for death in service benefits to be reported via Event 25.

In Newsletter 183 – July 2026 - GOV.UK, HMRC had confirmed that, following consultation, the proposed Event 25 reporting requirement has been replaced with more targeted alternative reporting measures. This represents a further example of HMRC responding to industry feedback as it refines the framework ahead of implementation.

A significant win for standalone group life

The latest regulations build on an important clarification already made by HMRC earlier this year.

The government's Technical note: Inheritance Tax on pensions - GOV.UK, updated on 29 May 2026, updated the outline of the requirements for when a lump sum death benefit can qualify as an excluded benefit for IHT.

Section 3.3.4 now provides that a lump sum death benefit will qualify as an excluded benefit where the deceased member was in employment or other work of a particular description immediately before death. This is a notable update from earlier drafting, which suggested that members needed to be actively accruing benefits under the scheme.

For the group risk market, employers, employees and their families, this clarification is particularly significant. Many standalone registered group life arrangements, covering over 8m employees, would have struggled to satisfy an active benefit accrual requirement. By focusing instead on whether an individual was in employment or other qualifying work immediately before death, HMRC has provided greater certainty that many registered death in service benefits will continue to fall outside the scope of the new IHT regime.

This is welcome news for employers, employees and beneficiaries, providing greater confidence for the those that rely on registered group life arrangements as a key component of their employee benefits strategy.

Questions remaining

While the revised wording is widely regarded as a positive development, some important questions remain unresolved.

The technical note states:

"To be a death in service benefit, the member must have been either directly employed or in other work of a particular description immediately before their death. This allows for individuals on non-standard employment contracts or in other types of work to receive a death in service payment. It is for individual employers or scheme sponsors and pension schemes to determine for the purposes of their scheme whether members on career breaks, long-term sickness absence and supported redundancy periods meet either of these requirements."

Although the statement provides helpful context, it also highlights an area of continuing uncertainty. HMRC has acknowledged that individuals on career breaks, long-term sickness absence or supported redundancy programmes may still qualify, but responsibility for determining whether the conditions are met has effectively been left to employers, scheme sponsors and trustees.

In practice, this means schemes may need to carefully review their rules, eligibility provisions and governance processes to ensure they can support any decisions made in these more complex cases.

The industry will continue to review the position as HMRC has outlined that it will publish further secondary legislation, guidance and supporting materials.

What happens next?

HMRC has indicated that further guidance and legislation will continue to be published before April 2027. The current roadmap includes:

• Autumn 2026: Technical Note 3, expected to cover international issues, the interaction between IHT and income tax, and further guidance on intestacy, charities and trusts
• Autumn to Winter 2026/27: Draft guidance shared with industry stakeholders for consultation
• Autumn to Winter 2026/27: Additional regulations covering split schemes and excepted estates
• Winter to Spring 2027: Public communications activity to explain the changes
• Spring 2027: Publication of final guidance and supporting materials