New calculations produced by NFU Mutual, the financial advice firm, show that in some extreme scenarios, estates could face a 91% charge on pension funds due to a triple tax hit.

This will be a major concern for estates particularly those valued at over £2m, but this new tax will hit many more people than just the wealthy. It is crucial to note that pension pots inherited after the deceased was aged 75 will not only incur 40% IHT but are also liable for income tax at the effective tax rate of the beneficiary.

This will hike the tax rate to as high as 85% for those on additional 45% rate, while the estimated 7.8 million higher rate taxpayers on 40% would have a 60% rate of IHT on the pension pot. With IHT thresholds frozen for years, and property values up more than fivefold since those rates were introduced, this measure announced by former chancellor Rachel Reeves will have a far-reaching impact on taxpayers.