---
title: "Inheriting Money: What to Do in the First Year and How the 2027 Pension Tax Change Affects You"
description: What to do when you inherit money, from the first weeks to the first year, and how unused pensions entering inheritance tax from April 2027 affect you.
author: Dr Marina Nani (Editor-in-Chief)
date: 2026-11-07T18:53:32.295Z
updated: 2026-11-07T18:53:32.309Z
canonical: https://richwoman.co/article/inheriting-money-what-to-do-in-the-first-year
image: https://cdn.nanimediahouse.com/pexels-7680738.webp
categories: Money, Power & Money
content_type: Guide
region: United Kingdom
publication: Rich Woman Magazine
schema_type: Article
---

For many women, an inheritance arrives twice: first from parents and later from a husband or partner. Women live longer than men on average, so the second inheritance often arrives in a time of grief, with decisions attached.

The rules are also changing. From 6th April 2027, most unused pension pots will count towards an estate for inheritance tax, which is likely to bring more estates into the tax for the first time. Here is how to handle the first year, step by step.

## Give Yourself Time Before Big Decisions

The first months after a death are the worst time to make choices you cannot reverse. Put any money you receive into an easy-access savings account in your own name and leave it there while you grieve and take stock.

Hold off on selling the family home, lending money to relatives, paying off every debt at once or buying investments from anyone who contacts you first. Each of these can wait a few months, and each is hard to undo.

Watch for strangers. A bereavement is often followed by calls and letters offering to 'help' with investments or property. A genuine adviser never pressures you to act quickly.

## Find Every Account and Document

Before you can plan, you need a full picture. Gather the will, bank and savings statements, pension paperwork, life insurance policies, property deeds, share certificates, details of any debts and the instructions for online accounts.

In the UK, the government's Tell Us Once service lets you report a death to most government departments in one go, and the free Pension Tracing Service helps you find workplace and personal pensions that may have been forgotten. Keep a single folder with every account, its value and the name of the person you dealt with.

## How Inheritance Tax Works in the UK

Inheritance tax applies to estates worth more than £325,000. That threshold rises to £500,000 when a home is passed to children or grandchildren. Tax is normally charged at 40% on the part of the estate above the threshold.

Anything left to a husband, wife or civil partner is normally free of inheritance tax, and any threshold the first partner did not use can pass to the survivor. The first death often brings no tax bill as a result, but the estate the surviving partner later leaves can be larger.

The thresholds are frozen until April 2031, so as house prices and savings grow, more estates cross them.

## What Changes for Pensions in April 2027

Until now, most unused pension pots have sat outside the estate for inheritance tax. From 6th April 2027, money left in private pensions, along with some pension death benefits, will be added to the value of the estate when the tax is calculated.

This matters twice over. If you inherit a pension pot, it may now take an estate over the threshold. If you have been saving into your own pension with the plan of passing it on untouched, that plan needs a second look.

Ask your pension providers to confirm who is named to receive each pot, and check that those nominations match your will. If your circumstances have changed through bereavement, divorce or remarriage, update them now rather than after April 2027.

## Make Your Own Plans While You Are Thinking Clearly

An inheritance is often the moment you realise nobody has seen your own paperwork. Write or update your will, set up lasting powers of attorney for money and health and tell someone you trust where your documents are kept.

If you have no will, the law sets out who inherits, and the result may not be what you would have chosen.

## Choosing a Financial Adviser

For a large inheritance, an independent financial adviser can help you plan tax, income and investments together. Check that anyone you consider is listed on the Financial Conduct Authority register, ask how they are paid before the first meeting and choose someone who explains things in words you understand.

Take a friend or family member you trust to the first meeting. Write down your questions in advance, and do not sign anything on the day.

An inheritance is the last thing someone did for you. Taking a few months to understand it is the best way to make it last.

## Frequently Asked Questions

**Q: What is the first thing you do when you inherit money?**
Put the money somewhere safe and easy to reach, such as an easy-access savings account in your name, and avoid big decisions for a few months. Use that time to gather every document, understand any tax due and work out your goals before you invest, spend or give any of it away.

**Q: What is the smartest thing to do with inherited money?**
The smartest first step is to wait and plan. Clear any expensive debt, keep an emergency fund, then build a plan for the rest with a regulated adviser, covering tax, income and long-term investments. Avoid rushing into property, loans to family or products sold to you by someone who contacted you first.

**Q: How much money can you inherit without having to pay taxes?**
In the UK, inheritance tax is paid from the estate, not usually by the person who inherits. An estate can pass up to £325,000 free of inheritance tax, rising to £500,000 when a home goes to children or grandchildren. Anything left to a husband, wife or civil partner is normally exempt. Rules differ in other countries.