The Chancellor confirmed pension pots will become liable for inheritance tax in April 2027 during last year’s Autumn Budge.t.
UK households warn HMRC ‘you won’t get a penny’ after ‘six-figure bills’
UK households are being told to take action immediately to avoid “eye-watering” inheritance tax bills from Labour Party Chancellor Rachel Reeves. The Chancellor confirmed pension pots will become liable for inheritance tax in April 2027 during last year’s Autumn Budget.
Speaking to Newspage, analysts anticipate a substantial surge in the implementation of Deeds of Variation as families seek to mitigate the impact of these new regulations.
Leicester-based financial director Scott Gallacher said: “In many cases, this approach is creating six-figure IHT savings, as well as providing valuable protection against divorce settlements and long-term care fees for future generations.”
READ MORE Anyone on standard energy tariff urged to act with 22 million at risk
Samuel Mather-Holgate from Swindon-based Mather and Murray Financial described IHT as “compound interest in reverse and pound cost savaging” when applied across multiple generations.
“Ideally, clients should be talking to their parents about leaving inheritances directly into a Discretionary Trust from the outset, avoiding the need for a Deed of Variation later,” he said.
“But in reality, these conversations can be challenging some parents have even threatened to disinherit children who raise the idea,” he said.
“A probate expert will be able to set up a Deed of Variation without risking the RNRB, carving out assets outside the property. However we expect to see a flood of botched deeds as people try to cut corners and do it themselves or turn to unregulated ‘advisers’,” David Robinson said.
“The increasingly-pressed middle will be left with a tough choice of paying for expensive advice or their beneficiaries paying a potentially eye watering IHT bill,” Mr Robinson said.
One resident replied: “You won’t get a penny, I’ll spend it abroad, I’m not giving it to a socialist fraud, I’ve worked too hard and will sit in the sun supporting another economy, absolute clowns!”
“Well we’ll spend it on holidays. Nothing left for Rachel but our family will have some super holidays,” a second said.