The Treasury has rejected calls from a House of Lords committee to extend inheritance tax deadlines for bereaved families facing new charges on pension assets.
In correspondence released on March 30, the Government said it would maintain "existing, longstanding deadlines which ensure tax is collected quickly and efficiently".
The decision comes ahead of reforms due to take effect from April 2027, when unspent pension pots will be brought within the scope of inheritance tax for the first time.
Chancellor Rachel Reeves announced the measure in the October 2024 Budget, meaning some estates could face charges of up to 40 per cent on inherited pension wealth.
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The House of Lords committee had urged ministers to extend the payment window from six months to 12 months.
Steve Webb, now a partner at Lane Clark & Peacock, criticised the decision.
Mr Webb said: "The new process for including pensions in inheritance tax is undoubtedly going to slow things down for bereaved families."
He said families could face delays while waiting for information needed to calculate their liabilities.
Inheritance tax pensions change: Treasury rejects calls to extend payment deadline for bereaved families
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Mr Webb added: "It would not have cost the Government much money to allow a modest extension in the deadlines and this would have reduced the stress on families.
"This is frankly a heartless decision and the Government should reconsider."
Rachel Vahey, head of public policy at AJ Bell, said the current timeframe may prove challenging.
"The six-month deadline was set in past centuries at a time when settling financial matters was generally a more straightforward process."
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Pension providers will be required to supply information within set timeframes
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She added: "As we hurtle towards April 6 2027, it will become more obvious the administrative distress this policy decision will cause."
The House of Lords committee has previously warned that personal representatives face a significant administrative burden when handling estates.
Executors are required to identify assets, contact pension providers and obtain valuations before determining the tax owed.
Peers said these steps may be difficult to complete within six months, particularly in cases involving complex pension arrangements.
Under current rules, inheritance tax is charged at 40 per cent on estates valued above £325,000.
An additional £175,000 allowance applies when a primary residence is passed to direct descendants.
Interest is charged on unpaid tax from the end of the sixth month following death, currently set at 7.75 per cent.
The Treasury said support measures are already in place for executors who face challenges meeting deadlines.
Pension providers will be required to supply information within set timeframes, while executors can instruct schemes to pay inheritance tax liabilities directly from pension funds.
Personal representatives are also able to request that up to half of an inherited pension is retained for up to 15 months to cover potential tax bills.
Ministers also confirmed they would not extend deadlines for estates that include business or agricultural assets.