{"id":559258,"date":"2026-03-25T07:35:23","date_gmt":"2026-03-25T07:35:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/559258\/"},"modified":"2026-03-25T07:35:23","modified_gmt":"2026-03-25T07:35:23","slug":"inheritance-tax-warning-as-pension-rule-change-could-leave-families-facing-unexpected-bills","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/559258\/","title":{"rendered":"Inheritance tax warning as pension rule change could leave families facing unexpected bills"},"content":{"rendered":"

A major shift in pension taxation is just over a year away, with changes set to bring unused defined contribution pension savings into the scope of inheritance tax.<\/p>\n

From next year, any unused money held in defined contribution pensions will be counted as part of an individual\u2019s estate for inheritance tax purposes.<\/p>\n

The change is expected to draw more estates into the inheritance tax net, although the overall proportion of people affected is forecast to remain relatively small.<\/p>\n

The reform means some families could face unexpected tax liabilities during bereavement if planning has not been undertaken in advance.<\/p>\n

Inheritance tax becomes payable when an estate exceeds \u00a3325,000, known as the nil rate band.<\/p>\n

An additional allowance, called the residence nil rate band, provides a further \u00a3175,000 when passing a home to children or grandchildren.<\/p>\n

Married couples and civil partners can transfer assets to each other without incurring inheritance tax due to the spousal exemption.<\/p>\n

They can also inherit any unused nil rate bands, meaning a surviving partner could pass on up to \u00a31million without triggering inheritance tax.<\/p>\n

\"Pension\"\/<\/p>\n

Families face surprise inheritance tax bills under pension rule change<\/p>\n

| <\/p>\n

GETTY<\/p>\n

Cohabiting couples are not eligible for the same exemptions under current rules.<\/p>\n

Gifting assets is one method individuals may use to reduce the size of their estate ahead of the changes.<\/p>\n

There is an annual gifting allowance of \u00a33,000, which can be carried forward by one year if unused.<\/p>\n

Larger gifts, known as Potentially Exempt Transfers, fall outside the estate if the individual survives for seven years after making them.<\/p>\n

\"StateAre you affected by state pension age changes? | GETTY<\/p>\n

If death occurs within that period, inheritance tax may still apply, although the rate can be reduced depending on timing.<\/p>\n

Specific exemptions also apply to wedding gifts, with limits of \u00a35,000 for a child, \u00a32,500 for a grandchild and \u00a31,000 for others.<\/p>\n

Individuals may also give away surplus income without affecting their estate, provided the payments do not reduce their standard of living.<\/p>\n

Certain conditions apply to ensure gifts are not still considered part of the estate.<\/p>\n

For example, assets given away but still used by the original owner, such as continuing to live in a gifted property without paying market rent, may be treated as a “gift with reservation” and remain subject to inheritance tax.<\/p>\n

Maintaining records of gifts, particularly those made from surplus income, is required to demonstrate compliance with the rules.<\/p>\n

Professional advice may be sought to ensure estate planning aligns with current inheritance tax regulations.<\/p>\n","protected":false},"excerpt":{"rendered":"A major shift in pension taxation is just over a year away, with changes set to bring unused…\n","protected":false},"author":2,"featured_media":559259,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,27382,134,44,6107,131,132,12384,1958,3322],"class_list":["post-559258","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-ca","tag-canada","tag-finance","tag-inheritance-tax","tag-money","tag-news","tag-pensions","tag-personal-finance","tag-personalfinance","tag-sgg","tag-state-pension","tag-tax"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/559258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=559258"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/559258\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/559259"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=559258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=559258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=559258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}