UK households have been given “options” to escape a brutal inheritance tax raid from the Labour Party government. A pensions expert and personal finance guru has explained how there are a range of options for UK households who want to escape the HMRC bills.
David Piltz, CEO at Gallagher’s Employee Benefits & HR Consulting Division in the UK, warned: “In the past, unused pension benefits were generally exempt from inheritance tax. But under the Autumn Budget, some pension assets will need to be included in the value of the estate. This could lead to a greater amount of the estate being above the ‘nil rate band’ which is subject to an inheritance tax charge of 40%.
“The changes are due to be implemented from April 2027, but the pensions industry is providing significant feedback on the practicalities of the reforms and so the shape of the proposals could change.” He said: “A key first step is to consider the potential exposure.
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“The government still expects that the majority of estates will not pay inheritance tax, whether through the assets of the estate being below the nil rate band or because the exemption for benefits paid to a spouse or civil partner applies.”
He warned: “Each option comes with advantages and disadvantages and many options are irreversible and so it is imperative that financial advice is taken. Even where advice has been taken in the past, this should be reconsidered in light of the possible changes.
“Whatever steps are taken, an eye should be kept on these proposals as they develop, given the potential for changes.” Among the ideas mooted by David this week, after the changes were confirmed by Chancellor Rachel Reeves in her Autumn Statement last October, were cohabiting partners getting married, gifting non-pension assets in accordance with inheritance tax rules and changing the form of pension benefits.