What happens to your offshore bond, QROPS and SIPP when you die

Somewhere in a filing cabinet, possibly in a country you no longer live in, there is a form with your signature on it. It is called an expression of wishes, or a beneficiary nomination, and it tells your pension trustees who you would like to receive your pension if you die. If you signed it before your divorce, or before your children were born, it may say the wrong thing. And that form, plus the trustees' own judgement, decides where the money goes. Your will usually has no say.

Nobody tells you this when you sign. Most people complete the form once, at account opening, and never again. From 6 April 2027 the stale form sits next to a new inheritance tax bill, because the Finance Act 2026 pulls unused pensions into the estate. Here is what happens to each of the three wrappers, who decides, and what changed.

The offshore bond: the will's asset, with a catch

Start with the wrapper most people don't call by its real name. If you hold a plan with RL360, Utmost, or an old Friends Provident International policy, you probably think of it as your offshore savings plan. Legally it is a life assurance investment bond, and of the three wrappers here it is the only one your will normally controls. A bond you own in your sole name is an asset of your estate: it passes under your will, and its value counts in your estate for inheritance tax. Jointly owned bonds pass to the surviving owner first.

The catch is the lives assured. A life assurance bond ends when the last person named as a life assured dies. If that person is you, the bond doesn't pass to anyone; it pays out, and HMRC treats the ending of the policy as a chargeable event. Any gain built up over the years counts as your income in the tax year of your death, and your personal representatives deal with it through your final tax return. If the bond was set up with additional lives assured, your children for instance, or as a capital redemption bond with no lives assured at all, it survives your death and your executors or beneficiaries can keep it going or cash it in with more control over the timing and the tax. Which kind you own was decided on the day it was sold to you.

Two practical notes. First, where the provider sits matters for paperwork: RL360, for example, states that because its plans are issued under Isle of Man law, Isle of Man probate is required on the owner's death unless the plan is in trust. Second, if the adviser who sold the bond has vanished, write to the provider's claims team; RL360, for instance, publishes its death claim requirements directly, and other providers do the same.

The SIPP: the will is silent

A UK SIPP does not pass under your will, and in the normal case it isn't governed by it at all. Lump sum death benefits are paid at the discretion of the scheme trustees or provider, guided by your expression of wishes. HMRC's own manual states the position plainly: in most cases the benefits are paid at the trustees' discretion even where there is a nomination expressing a wish. That discretion is the reason pension money has historically sat outside your estate. It is also the reason the stale form matters: the trustees aren't bound by it, but it is the main evidence of what you wanted, and a form naming the wrong person invites the wrong outcome at the worst time.

The income tax side is unchanged by the new rules and worth stating once. If you die before 75, benefits are generally free of income tax for your beneficiaries within a lump sum allowance of just over £1 million. If you die at or after 75, your beneficiaries pay income tax at their own marginal rate on what they draw.

The QROPS: scheme rules, another country

If a salesman moved your pension into a QROPS in Malta or Gibraltar during the transfer boom, the scheme's own rules and its trustees decide what happens on your death, under the law of the scheme's home jurisdiction. The routine is the same as a SIPP's, discretion guided by your nomination, but the trustee is overseas and the introducing adviser has often gone. You don't need an intermediary: schemes publish their administrator's contact details in the scheme particulars, and you can write to the trustee directly. If you haven't done so in years, that is the first letter to send.

Two pieces of UK reach survive the move. Payments from the scheme are reported to HMRC for a period after the transfer, and can still fall within UK tax rules if you are UK resident or have been recently: ten tax years for transfers made from 6 April 2017, five for earlier ones. The brochure line that a QROPS puts your pension permanently beyond UK tax was never true. From April 2027, what matters is where the scheme sits and how long you have been gone.

April 2027: the tax follows the money

The change is law: the Finance Act 2026 received Royal Assent on 18 March 2026 and brings most unused pension funds and death benefits into the inheritance tax estate for deaths from 6 April 2027. Discretion no longer keeps the money out of the calculation. Three practical points matter for expats.

Your executors carry the job. The personal representatives named in your will are responsible for reporting and paying any inheritance tax on the pension money, with schemes providing valuations, and beneficiaries able to direct a scheme to pay its share of the tax to HMRC directly. Your will never mentions your pension, but the people it appoints now account for it.

Your spouse is still protected. Funds passing to a surviving spouse or civil partner remain exempt in the usual way, though the exemption has conditions where the survivor isn't a long-term UK resident.

Residence decides how much of the map is caught. The new rules treat pension money as sitting where the scheme is established. If you have been UK resident in 10 of the last 20 tax years, your worldwide pension savings, the QROPS included, are in scope. If you left long enough ago to have shed long-term residence, the position appears to flip on the legislation's wording: the overseas scheme should generally be excluded property, outside UK inheritance tax, while the UK SIPP you left behind is caught regardless, because it sits in a UK scheme. The QROPS sold on a tax promise that faded may end up the sheltered asset; the SIPP everyone regarded as safely outside the estate is the exposed one. Whether any of that changes what you should do is a conversation for a regulated pensions adviser; knowing which side of the line each pot sits on is the starting fact your family will need.

Why a wills company is telling you this

Fair question. A will cannot direct a nominated pension, and nothing in this article changes that. But the will chooses the people. From April 2027 your executors must find every pension you hold, obtain valuations from schemes in however many countries you've worked in, and account for the tax on money the will itself never touches. An executor chosen carelessly, or an estate with no will and whoever the intestacy rules produce, inherits an international paperwork job on a deadline. A will written by someone who knows what it does not control, sitting alongside a current expression of wishes for each scheme and a bond schedule that says who the lives assured are, is a coherent estate. Any one of the three written in ignorance of the others is how the mess starts.

The death-route audit

Ten minutes, no adviser needed.

1. Find the three sets of paper: your will, an expression of wishes for every pension scheme (SIPP and QROPS), and the policy schedule for any offshore bond showing owners and lives assured.
2. Date-check each against your life: anything signed before your marriage, divorce, latest child or latest country is due a refresh.
3. For pensions, ask each provider or trustee for a fresh expression of wishes form; providers accept updated nominations directly, usually without charge.
4. For the bond, note whether it is in trust, who the lives assured are, and where probate would be needed; if the answers surprise you, that is a conversation with a regulated adviser, and possibly with the provider's technical team.
5. Make or update the will so the executors are people you'd trust with an international paperwork job, and guardians are named if you have children.
6. Keep the three sets of paper in one place your family knows about.

An Expat Legacy will is drafted under the law of England and Wales around expat circumstances, executor and guardianship choices included, and reviewed by a person before your documents are released: £149 for a single will, £249 for mirror wills for a couple. The nomination forms are usually free. The will is the one document in the set that is entirely in your control.

Sources

• Finance Act 2026, Part 2 (legislation.gov.uk)
• Finance Act 2026, bill stages (UK Parliament)
• HMRC Inheritance Tax Manual IHTM17051 (GOV.UK)
• HMRC Pensions Tax Manual PTM172000 (GOV.UK)
• HMRC Insurance Policyholder Taxation Manual IPTM7390 (GOV.UK)
• RL360, Why use a trust with an offshore plan (RL360)
• Inheritance Tax on unused pension funds and death benefits (GOV.UK)
• Inheritance Tax if you die when based outside the UK (GOV.UK)

Expat Legacy provides England and Wales wills and general information about cross-border estate planning. This is general information only. It is not legal, tax, pensions or investment advice for your circumstances. Providers are named as examples only, and nothing here suggests transferring or restructuring any product. Tax treatment depends on individual circumstances and can change. For decisions about pensions or investment bonds, take regulated financial advice. Position stated as at August 2026.