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

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 tax liabilities, depending on the recipient’s income tax bracket.” Greer’s message to those potentially in the firing line? In future, the first £1m won’t attract any IHT – Reeves said this would “protect small farms” but assets above this level will incur a 20 per cent charge for the first time. Another asset currently enjoying a generous tax break – shares listed on the London Stock Exchange’s junior Alternative Investment Market – will also now be taxed at 20 per cent.