{"id":353804,"date":"2026-01-05T19:02:09","date_gmt":"2026-01-05T19:02:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/353804\/"},"modified":"2026-01-05T19:02:09","modified_gmt":"2026-01-05T19:02:09","slug":"pension-savers-at-risk-of-cash-shortfalls-due-to-inheritance-tax-raid-from-rachel-reeves","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/353804\/","title":{"rendered":"Pension savers at risk of cash shortfalls due to inheritance tax raid from Rachel Reeves"},"content":{"rendered":"

Pension holders could face a cash shortfall when inheritance tax (IHT) rules change in April 2027, warns Bowmore Financial Planning.<\/p>\n

The financial advisory firm said new IHT liabilities could expose families to liquidity problems where pensions hold commercial property.<\/p>\n

Financial Conduct Authority (FCA) data shows 54,387 Self-Invested Personal Pension (SIPP) plans currently include commercial property holdings.<\/p>\n

Bowmore said these assets can be difficult to sell quickly, which could cause problems once pensions become subject to inheritance tax.<\/p>\n

Under existing rules, inheritance tax is typically payable within six months of death.<\/p>\n

According to Bowmore, beneficiaries may struggle to sell commercial property investments within that timeframe.<\/p>\n

The firm warned that families could be forced to accept lower prices in order to secure a buyer quickly, which could lead to distressed sales rather than planned disposals.<\/p>\n

HM Revenue and Customs (HMRC) can agree payment plans where inheritance tax cannot be paid within six months.<\/p>\n

Bowmore said interest continues to accrue on any unpaid tax during this period, and that interest charges add to the financial pressure facing beneficiaries.<\/p>\n

The combination of interest costs and administrative requirements could push families towards selling property rapidly, reducing the value ultimately realised from pension assets.<\/p>\n

\"Pensioner\"\/<\/p>\n

Pension holders could face a cash shortfall when inheritance tax rules change in April 2027<\/p>\n

| <\/p>\n

GETTY<\/p>\n

Bowmore said the situation is particularly challenging where commercial property markets are slow-moving.<\/p>\n

It said pressure to generate cash can leave families with limited options, highlighting that some SIPP-held properties are even harder to sell.<\/p>\n

Its analysis identified 1,357 pension plans holding commercial property located overseas; assets which often take longer to sell due to legal and regulatory complexity.<\/p>\n

A further 8,490 SIPP plans were found to contain syndicated commercial property investments.<\/p>\n

These arrangements involve multiple investors sharing ownership of a single asset.<\/p>\n

Bowmore said syndicated structures can make agreement on a sale more difficult.<\/p>\n

\"InheritanceAverage Inheritance tax paid by region | CHATGPT\/ONS<\/p>\n

The firm said both overseas and syndicated property holdings are typically less liquid than UK property owned outright within a single SIPP.<\/p>\n

Bowmore also pointed to structural issues linked to how SIPP property is owned.<\/p>\n

It said SIPP providers, rather than individual pension holders, are the legal owners of commercial property assets.<\/p>\n

This means additional procedural steps are required before a sale can proceed.<\/p>\n

Bowmore said these steps can add further delays to an already lengthy transaction process.<\/p>\n

The firm said this could make it harder for families to meet inheritance tax deadlines.<\/p>\n

Mark Incledon, chief executive officer at Bowmore Financial Planning, said the rule change represents a major shift for pension holders.<\/p>\n

He shared: “Commercial property can be very slow to sell but in the past that has been less of a problem as there was no IHT bill to pay on property held in a pension.”<\/p>\n

The introduction of inheritance tax on pensions alters the risks associated with holding property in a SIPP.<\/p>\n

Mr Incledon said: “Introducing IHT on pensions fundamentally changes the risk profile of holding commercial property inside a SIPP.”<\/p>\n

He said these assets were not designed to be accessed quickly.<\/p>\n

Mr Incledon said families could be left trying to raise large tax bills without readily available cash.<\/p>\n

He said: “These assets were never designed to be accessed quickly, and with the changes to IHT rules families could suddenly find themselves trying to raise a six-figure tax bill without the liquidity to do so.”<\/p>\n

\"Rachel<\/p>\n

The firm said this could make it harder for families to meet inheritance tax deadlines<\/p>\n

| GETTY \/ PA <\/p>\n

Mr Incledon warned that several factors could combine to create serious difficulties for beneficiaries.<\/p>\n

He said: “The combination of SIPP ownership structures, slow-moving commercial property markets and the new inheritance tax rules has the potential to create a perfect storm.”<\/p>\n

Bowmore said pension holders with illiquid assets should consider how their estate plans will be affected by the changes.<\/p>\n

The firm said reviewing pension arrangements ahead of April 2027 could help reduce the risk of future cash pressures.<\/p>\n","protected":false},"excerpt":{"rendered":"Pension holders could face a cash shortfall when inheritance tax (IHT) rules change in April 2027, warns Bowmore…\n","protected":false},"author":2,"featured_media":353805,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,10429,2222,50,4178,4174,4175,2331,474,56,54,55],"class_list":{"0":"post-353804","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-inheritance-tax","11":"tag-money","12":"tag-news","13":"tag-pensions","14":"tag-personal-finance","15":"tag-personalfinance","16":"tag-sgg","17":"tag-tax","18":"tag-uk","19":"tag-united-kingdom","20":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/353804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=353804"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/353804\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/353805"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=353804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=353804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=353804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}