Inherited pensions could see 'double tax hit' of up to 70.5%: How it works and what new rules mean for YOU
4 months, 2 weeks ago

Inherited pensions could see 'double tax hit' of up to 70.5%: How it works and what new rules mean for YOU

Daily Mail  

Wealthy families could face a 'double tax hit' on inherited pensions of up to 70.5 per cent under new rules announced in the Budget. They have therefore become widely used as a way to pass wealth down the generations, and are often spent last by people whose estates could be hit by inheritance tax at 40 per cent. This is effectively equivalent to another £140,000 of inheritance tax on the pension scheme, meaning an effective tax rate of 70.5 per cent. LCP says the change will surely delay payment of death benefits while pension schemes liaise with the deceased’s personal representative to work out what they need to hold back for inheritance tax purposes. As defined contribution pension funds could now be subject to up to 40 per cent inheritance tax on death, we will probably see greater withdrawals from pension pots.

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History of this topic

Inheritance tax raid up by £600MILLION - as they are set to exceed £8billion by end of financial year
2 months, 3 weeks ago

Inheritance tax raid up by £600MILLION - as they are set to exceed £8billion by end of financial year

Daily Mail  

Bereaved families paid a staggering £5.7billion in inheritance tax in just eight months of this year. The year-on-year increase means inheritance tax bills look likely to exceed £8billion this financial year. Families paid £7.6billion in inheritance tax in the last financial year, up from £7.1billion the year before. A series of changes announced by Chancellor of the Exchequer Rachel Reeves …

I inherited a tax-free pension from my husband who died before 75 - what happens after Budget changes?
4 months ago

I inherited a tax-free pension from my husband who died before 75 - what happens after Budget changes?

Daily Mail  

Treasury plans: Chancellor announced in the Budget that pensions will become liable for inheritance tax from April 2027 My husband died before the age of 75 and I inherited his Sipp which has been transferred to my name. Tanya Jefferies, of This is Money, replies: We have received many messages from readers about plans announced in the Budget to make …

Why inheritance tax changes for pensions means a double hit for beneficiaries
4 months, 2 weeks ago

Why inheritance tax changes for pensions means a double hit for beneficiaries

The Independent  

Inheritance tax is an odd one; many worry about it but only a tiny minority ever end up paying it. Unspent pension savings do not currently count towards the IHT threshold, creating an incentive for wealthy individuals to save through pensions as a means of lowering their kids’ bills. For families inheriting larger pension pots, this will lead to significant …

Pensions to be brought into inheritance tax scope, says Reeves
4 months, 2 weeks ago

Pensions to be brought into inheritance tax scope, says Reeves

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Chancellor Rachel Reeves said she will close the “loophole” …

Families face inheritance tax raid on pensions - what it means for your wealth
4 months, 2 weeks ago

Families face inheritance tax raid on pensions - what it means for your wealth

Daily Mail  

Inheritance tax: Pensions will be included in the assets that count towards death duties from April 2027 Chancellor Rachel Reeves has launched an inheritance tax raid on savers in the Budget by making pensions liable for the levy. Pensions will be included in the assets that count towards 40 per cent inheritance tax from April 2027, throwing family legacy plans …

Will pension savers get slapped with a 'death tax' in the Budget and what would it mean for you?
4 months, 3 weeks ago

Will pension savers get slapped with a 'death tax' in the Budget and what would it mean for you?

Daily Mail  

Generous rules: Pensions are not included in the assets that count towards inheritance tax at present Pensions are not included currently in the assets that count towards inheritance tax, but that could change in any major Budget overhaul. People will be more likely to spend pensions in their lifetime 'The inheritance tax treatment of defined contribution pensions is currently very …

Rachel Reeves urged to launch £2bn inheritance tax raid on pension pots
8 months ago

Rachel Reeves urged to launch £2bn inheritance tax raid on pension pots

The Telegraph  

David Sturrock, an economist at the IFS, said: “The current system gives an incentive to hold on to pension wealth and use other assets to fund retirement. “In terms of the inheritance tax revenues that would be gained from bringing pension pots into inheritance tax, the impacts now would be modest. Introducing IHT would mean taxing pension pots in the …

Pensions should be subject to inheritance and income tax, IFS claims
2 years, 3 months ago

Pensions should be subject to inheritance and income tax, IFS claims

Daily Mail  

Pension pots should be included in the value of estates at death for the purposes of inheritance tax, according to the Institute for Fiscal Studies' latest 'Death and taxes and pensions' report. According to the IFS, subjecting pensions to inheritance tax would raise 'substantial' revenue for the Government over time and remove the 'perverse incentive' to avoid using a pension …

Spend your pension pot last to defend savings from taxman
7 years, 4 months ago

Spend your pension pot last to defend savings from taxman

Daily Mail  

Hoard your pension and spend other available cash and investments first, to keep your money out of the taxman's clutches. But anyone who wants to minimise their annual income tax, or use up their capital gains tax allowance efficiently, might also benefit from running down assets held outside a pension first. 1) Investments held outside Isas or other tax-efficient wrappers, …

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