Reeves Accused Of ‘Killing Off’ Pensions With 40% Death Tax Plan

The Right Honourable  The Baroness Altmann  CBE   Minister of State for Pensions  11 May 2015 – 15 July 2016

 

 

Former Pensions Minister Baroness Ros Altmann has accused Chancellor Rachel Reeves of planning to “kill off” modern pensions with a “catastrophic” inheritance tax raid on the bereaved.

 

Altmann warned that Reeves’s proposal to impose a 40% inheritance tax on unused pension pots would devastate savers, discourage contributions, and create chaos for grieving families forced to calculate complex tax bills within six months of a loved one’s death.

 

“These new rules don’t just mean a 40% tax on inheritances,” she said. “They are a fundamental restructuring of how pension death benefits are administered and taxed, with even funeral benefits facing a 40% hit.”

 

Under Reeves’s plan, from April 2027, most unused pension funds and death benefits will be counted as part of a deceased person’s estate — ending the long-standing rule that keeps such assets outside inheritance tax.

 

Altmann branded the scheme “unworkable”, warning that even professionals would struggle to meet the deadline, let alone ordinary families. “Many executors are just relatives, unpaid and inexperienced in tax,” she said.

 

Currently, most UK pensions are structured as discretionary trusts, meaning administrators — not the deceased — decide who receives benefits. The change would drag these funds into the estate for the first time, potentially leaving widows and children with huge tax bills.

 

“This is not reform,” Altmann said. “It’s a disaster waiting to happen — Reeves is taxing the dead to fund the living.”

 

 

 

Key Takeaways:

• Baroness Ros Altmann warns Rachel Reeves’s tax plan could “kill off” pensions.

• From 2027, unused pensions face a 40% inheritance tax.

• Critics say the rule is “unworkable” and punishes grieving families.

 

Source: Daily Express

It’s theft.

Troll post removed @Taboo2

17 minutes ago, TedG said:

It’s theft.

Not until a theft has taken place it’s not.