How will pension pots be taxed in future?

Inheritance tax will be charged on pension pots from 2027 to stop the use of pensions as a tax planning tool to reduce death taxes

The government plans to introduce legislation to include unused pension funds and death benefits payable from a pension into the total value of estates, which means they will be brought into inheritance tax for the first time from 6 April 2027.

The move will be a rollback from the reforms introduced under the pension freedom rules in 2015 by former chancellor George Osborne, which removed the old 55% IHT charge on unused pensions.

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