Today’s Budget – IHT to apply to wealth passed on through pensions

Claire Carey, partner, comments: “Grappling with an apparently large hole in Treasury coffers, the first female Chancellor, Rachel Reeves, delivered the Budget earlier today. With Labour having committed in its Manifesto not to ‘increase taxes on working people’, the Chancellor announced that wealth inherited through pensions will be brought under the inheritance tax banner from April 2027.”

“Following widespread speculation that pensions would once again fall under the Government’s microscope, today’s announcement wasn’t unexpected. But the widespread scope of the proposals may take many by surprise. The ‘unspent pensions pots’ being targeted by the inheritance tax proposals currently include both DB lump sum death benefits and possibly DC benefits to be paid as income to a dependant through an annuity or a drawdown facility.”