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Labour's pension inheritance tax grab could force grieving families to take out loans at 7.75% interest

Labour's pension inheritance tax grab could force grieving families to take out loans at 7.75% interest

Bereaved families may be pushed into expensive short-term loans under Labour's plan to include pensions in the scope of inheritance tax from April 2027. Jo Summers of the Society of Trust and Estate Practitioners warned that pension payouts can take up to two years to be received, leaving families hard-pressed to meet HMRC's six-month payment deadline.

A £100,000 inheritance tax bill left unpaid for six months already attracts nearly £4,000 in interest at HMRC's current 7.75% rate.

The Society of Trust and Estate Practitioners has written to Treasury minister James Murray demanding legislative fixes before April 2027.

Shadow pensions minister Peter Bedford said: 'Families should not be forced into high-interest debt to pay inheritance tax or pass on their homes.'

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 TelegraphSuaraGarut.IDSTEP Seeks Pension IHT Changes Before 2027 RulesBirmingham LiveNew HMRC inheritance tax rules under Andy Burnham with £4,000 interest warning issued
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