Lump sum payment coming out of pension schemes are not usually included in a deceased person’s estate and so escape inheritance tax. But that is not always the case. Each individual pension arrangement needs to be examined carefully. For example, a lump sum payment out of the NHS pension scheme which was not paid to a spouse or civil partner will usually form part of the estate and thus be liable to inheritance tax. If the estate you are dealing with, as an executor or administrator, contains unusual pension arrangements then do not hesitate to contact us either for advice or we can deal with the administration for you.