Finance Bill 2026: No Tax on Inherited Pensions as Families Get Full Benefits

The Finance Bill 2026 proposes a major relief for bereaved families by exempting pension benefits paid to the dependents and beneficiaries of deceased pension scheme members from income tax.
The proposed tax exemption will apply to benefits paid to spouses, children, and other dependents.
“Upon the demise of a pension scheme member, the money paid to their spouses, children or dependents will be exempt from tax. Beneficiaries will receive the full amount of the benefits without deduction,” the Bill states.
If passed into law, families will retain the entire pension amount left behind by their loved ones, without any tax deductions.
According to the National Treasury, the measure is intended to protect families, support dependents, and enhance financial security during difficult times.
The Finance Bill 2026 was submitted to the National Assembly by the Cabinet Secretary for the National Treasury and published on May 5, 2026.
Following a public participation process that ended on May 25, 2026, the Bill is currently before Parliament for debate and consideration. It is expected to be signed into law by the end of June.