Yes, in most cases. UK pension tax rules in 2026/27 do not generally require beneficiaries to live in the UK or be British, so you may be able to nominate children, a partner or anyone else living abroad, depending on your scheme's rules. For many pensions the final decision rests with the scheme administrator, and tax on what beneficiaries receive depends on your age at death, UK inheritance tax for deaths on or after 6 April 2027, and the rules where each beneficiary lives.

How nominations work

Most defined contribution pensions, such as personal pensions, SIPPs and many workplace schemes, ask you to complete an expression of wish or nomination form. You can usually name one or more people, split the fund in percentages and name a charity.

For many schemes the nomination is not binding. The administrator has discretion over who receives death benefits, and in practice normally follows an up-to-date nomination unless there is a good reason not to.

Defined benefit schemes work differently. Survivors' benefits are set by the scheme rules, typically for a spouse, civil partner or dependent children, and a nomination may only cover any lump sum.

Nothing in UK pension tax rules generally stops a beneficiary being resident overseas. Payments can often be made to an overseas bank account, though schemes will ask for identity checks and it may take longer.

How beneficiaries are taxed in the UK

The broad position is that UK income tax rules are the same for overseas beneficiaries as for UK ones:

  • If you die before 75, most lump sums can be paid free of UK income tax if paid within two years of the scheme being told of the death and within your Lump Sum and Death Benefit Allowance (£1,073,100 for most people). Some payments, such as annuities or income from older drawdown funds, can still be taxed.
  • If you die at 75 or over, payments are generally taxed as the beneficiary's income.

An overseas beneficiary may be able to rely on a double tax treaty to reduce or remove UK tax on taxable pension income, depending on the treaty and their residence.

Tax in the beneficiary's country

This is where non-UK beneficiaries can be caught out. Their own country may tax what they receive as income, as an inheritance or not at all. Spain, for example, has its own inheritance and gift tax, and Australia applies its own rules to foreign pension and inheritance receipts. Your beneficiaries may want local tax advice before taking money out.

Inheritance tax from 6 April 2027

For deaths on or after 6 April 2027, legislation is intended to bring most unused pension funds and certain pension death benefits into the inheritance tax calculation, subject to exclusions (such as certain death in service benefits and dependants' scheme pensions) and detailed rules still being finalised. The treatment depends on the type of arrangement, the member's long-term UK residence status and the nature of the benefit. The spouse, civil partner and charity exemptions are expected to continue to apply.

The Finance Act 2026 treats pension property as situated where the scheme is established, so a UK registered pension is UK property. Where your beneficiaries live does not by itself change whether inheritance tax is due. Our guide to inheritance tax on pensions from 2027 explains how the charge is worked out and paid.

A worked example

Illustrative example only, not a real client.

Helen lives in Dubai and has a £300,000 UK personal pension, with no other pension. Her nomination splits it equally between her son in Sydney and her daughter in London, and assume the administrator follows it. She dies aged 70 in 2028.

  • The £300,000 forms part of her estate for UK inheritance tax, alongside her other assets. Whether tax is due depends on the size of the wider estate, available nil rate bands and any exemptions.
  • After any inheritance tax, each child's share (£150,000 before tax) can generally be paid free of UK income tax, because Helen died before 75, the total is within her £1,073,100 allowance and, we assume, the funds are paid within two years.
  • Her son may need to check how Australia treats the money he receives.

Common mistakes

  • Never filling in a nomination form, leaving the scheme with little guidance.
  • Not updating it after divorce, remarriage or a new grandchild.
  • Assuming the beneficiary's country will not tax what they receive.
  • Letting contact details lapse, which can slow identity checks for overseas beneficiaries.

A regulated financial adviser can help. Get in touch for a free introduction.

Sources and further reading

Last reviewed: October 2026. Tax year: 2026/27, with rules for deaths on or after 6 April 2027. Jurisdictions covered: UK. Rates, legislation and guidance change, so recheck before relying on this. Rules can differ between England and Wales, Scotland and Northern Ireland; tax residence is fact-specific; treaty outcomes depend on residence, domicile or nationality provisions; examples are simplified and omit reliefs, costs, exchange rates and anti-avoidance rules. This is general information, not financial, tax or legal advice. Take advice in the relevant country before acting.