The Labour Party Chancellor’s plan could face major DELAYS, it has been warned, amid a proposal to tax inherited pensions to generate £40billion for the Treasury over the next two decades.
State pensioners could be spared from Rachel Reeves’ inheritance tax raid on pensions. The Labour Party Chancellor’s plan could face major DELAYS, it has been warned, amid a proposal to tax inherited pensions to generate £40billion for the Treasury over the next two decades.
Despite the plan for the HMRC raid, experts warn the timeline for implementation may be unrealistic. Steve Bish, founder of S Bish Estate Planning said: “With the Government announcing changes to inheritance tax, it’s natural that many people are wondering whether they need to rewrite their Will.
“But right now I’m advising my clients to ‘do nothing’.” Bish said: “Personally, I’ll be surprised if the government implements these changes in the timescale they’ve given. Writing and passing legislation is a technical and time-consuming process, so I expect them to push back the date from the proposed April 2027.”
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“No inheritance tax will be due on anything left to a spouse or civil partner,” he added. He urged savers to give gifts in a bid “reduce the size of your estate and remove assets from potentially being subject to inheritance tax at a later date.”
He warned that “you’re only able to make certain sized gifts” though. Speaking to GB News, Bish said charity donations, too, can “reduce your IHT bill from 40 per cent to 36 per cent.” This can help “lower the estate’s tax burden while supporting a good cause.”
“Understanding your options and making informed decisions about inheritance tax can be challenging,” he said. Mr Bish said: “If these changes do go ahead as planned, we’ll likely see pensions being used more for retirement income rather than as a wealth transfer tool.”
He added: “We don’t have sight of any draft legislation yet, and there’s been no feedback from consultation exercises. I anticipate we’ll only see the draft when the 2026 Finance Bill is published.”
“There is some speculation that there may be changes made to the seven year window for potentially exempt transfers,” he said. “I will be closely watching the Spring Statement on March 26 to see if new measures are announced.”
He added: “The most important advice I can give is to hold off until we know what ends up in the small print.”