Change to IHT on pensions proposals
HMRC has published a policy statement announcing an important change to its plans to include pension savings in an individual's estate for inheritance tax (IHT) purposes. What’s the full story?
In her first budget last Autumn Rachael Reeves dropped a number of bombshells. One of the biggest was her proposal to bring pension savings and death benefits within the scope of IHT from 6 April 2027. Currently, IHT only applies in very few circumstances. Where it does the pension companies may be responsible for calculating and deducting any IHT payable before passing the pension savings to the deceased’s beneficiaries. The Chancellor wanted to emulate this process when the new IHT rules were rolled out in 2027.
In a policy paper published on 21 July the government announced that the responsibility for calculating and paying IHT on pension saving will rest with the personal representatives of an estate, e.g. executors, and not pension companies. Although the consultation on the proposed new rules, which is open to everyone, doesn’t close until 15 September it had already become clear that the Chancellor’s original proposal was unrealistic.
Related Topics
-
HMRC to raid bank accounts for unpaid tax
HMRC is restarting the use of direct debt recovery for individuals and businesses who choose not to pay the tax they owe despite having the means to do so. Who’s in the firing line?
-
Mortgage interest: don’t miss out on unused relief!
You own a buy-to-let property and need to report your profits for 2024/25. You have a mortgage, but your calculations show that the tax reducer will exceed the rental profit. Will the excess go to waste?
-
When should you submit a protective claim to HMRC?
Your business has charged VAT on some sales but a recent tribunal decision has indicated that the goods are zero-rated according to the law. Should you submit a claim to HMRC for a rebate on your past sales?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.