Pensions can be a very tax efficient way of passing on wealth.

Generally, if a person dies before they are 75, the value of their pensions, provided they are modern flexible pensions,  can be passed on tax free.

Where a person dies aged 75 or over, the beneficiaries pay tax at their highest income tax rate. For modern flexible pensions, the value of the pensions do not form part of the deceased estate for Inheritance Tax purposes.