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Families could be forced into debt by Labour's pension inheritance tax grab, lawyers warn

Families could be forced into debt by Labour's pension inheritance tax grab, lawyers warn

Grieving families face being pushed into costly short-term loans to meet inheritance tax bills under Labour's plan to bring pensions into the IHT net from April 2027. Lawyers and probate professionals warn that delays of up to two years in pension payouts could leave relatives unable to pay tax within the six-month deadline before HMRC begins charging interest at 7.75%. The Society of Trust and Estate Practitioners has written to financial secretary to the Treasury James Murray urging legislative changes before the rules take effect.

A six-month delay in paying a £100,000 IHT bill would add nearly £4,000 in interest charges at current HMRC rates.

Experts warn thousands of families who planned around old pension rules face unexpected liabilities, with many yet to realise they are affected.

MoreThe Telegraph‘How do I stop my £900,000 pension becoming an inheritance tax nightmare?’ - The TelegraphGB NewsInheritance tax warning as pension changes could force families to take out costly loansThe TelegraphFamilies risk debt trap over Labour’s pension tax reforms - The TelegraphCity A.M.New inheritance tax rules will drastically change pension useSuaraGarut.IDSTEP Seeks Pension IHT Changes Before 2027 Rules
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