The government’s draft inheritance tax (IHT) reforms have been labelled “unworkable” by trade association PIMFA.

The body representing financial advisers and wealth managers across the UK has warned that the plans also risk creating serious problems for bereaved families.

Under the proposals, personal representatives (PR) – executors and administrators of a deceased person’s estate – must report and pay IHT within six months of death or risk interest charges.

However, pension schemes have up to two years to determine who should receive discretionary pension benefits.

This means PRs could be forced to either file potentially inaccurate IHT accounts, risking errors and overpayments, or delay filing until pension decisions are made and risk paying interest charges on money they may not even owe.

Platform firms within PIMFA have suggested this makes the changes unworkable as they will create confusion for PRs, many of whom will have little experience and no professional support and leave families paying interest on tax bills because the pension beneficiaries have not been confirmed.

PIMFA senior policy adviser, Julia Sage-Bell, said: “Under the current proposals, personal representatives, many of whom will be vulnerable, bereaved families face a no-win situation. They either have to report the pension fund without knowing who the beneficiaries are, potentially submitting an IHT account unnecessarily.

“Or, if they wait to get all the details right, they risk delaying probate and paying interest on taxes that might not even be owed.

“Either way, the process is complicated, stressful, and costly for families at a time when many are already dealing with grief.”

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