2 days ago
Inheritance tax will apply to pension pots... even if workers die before retirement as Rachel Reeves tries to fill financial black hole
Inheritance tax will apply to pension pots even if workers die before retirement age as Rachel Reeves scrambles to fill a financial black hole, according to reports.
The Chancellor announced last year that retirement savings will be subject to the levy from April 2027.
At present, the pots are passed tax-free to beneficiaries of a will.
Under the new rules, funds could be taxed at 40 per cent, the i paper reported.
HMRC confirmed to the outlet the tax will apply even if the saver had never accessed the funds.
It came after reports Ms Reeves is eyeing changes to inheritance tax to help plug public finances.
Policing minister Diana Johnson yesterday failed to dismiss speculation that Labour could introduce a lifetime cap limiting what a person can gift before their death.
Last week, a report by the National Institute of Economic and Social Research said Ms Reeves must find up to £50billion in tax rises or spending cuts.
Shadow Chancellor Mel Stride said targeting pension pots would be 'tantamount to class warfare'.
