Tax on pension pots ‘square peg in a round hole’

Inheritance tax on pensions like mixing ‘oil and water’ and six-month payment deadline to HMRC will be unworkable, Lords told

Witnesses from the pension industry appeared at a Lords committee to discuss government plans to bring pension pots into the scope of inheritance tax from April 2027.

The focus of the hearing was potential barriers to rolling out the new inheritance tax (IHT) framework, with huge concerns about timing issues and lack of government consultation on the intricacies of this hugely complex tax change. Under the new rules pension pots will be treated as part of the estate for IHT purposes.

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