'Cost will add to grief'

FIVE-MINUTE GUIDE TO... INHERITANCE TAX ON PENSIONS

- By Harvey Jones

CHANCELLOR Rachel Reeves is pressing ahead with plans to impose inheritance tax (IHT) on unused pensions from April 2027, despite a storm of opposition from experts, pension providers and savers.

The move will bring pension savings into the IHT net for the first time, but make probate even more costly and complex for grieving families.

In many cases, they will face a “double death tax”, paying IHT on the pension pot, followed by income tax when they make withdrawals.

HMRC received 649 responses to its consultation, the overwhelming majority against the proposals.

Yet Labour is pushing on, focused instead on the £1.5billion a year it claims the reform will raise by 2029.

Its only significant concession is to make executors responsible for handling the IHT reporting and payment, rather than pension scheme administrators.

This followed industry pressure, but may increase the administrative burden on families.