Budget 2024: How Inheritance Tax shake-up could impact you and your family
dailyrecord.co.ukA shake-up to Inheritance Tax has been announced by Chancellor Rachel Reeves as part of her Budget.The tax, which is sometimes paid on the “estate” of someone who has died including property, possessions and money, is reserved to Westminster and applies to Scots.
It currently raises about £8billion a year for the Treasury, however, very few people end up paying it at the moment.In a major change, the Chancellor announced that from 2027, inherited pensions will be subject to Inheritance Tax and considered part of someone’s “estate”.
Under current rules, if you die before the age of 75, the person inheriting your pension will not have to pay tax on it.But that will change in three years’ time with the person who inherits someone else’s pension paying Income Tax when they draw from it, meaning it will be treated as income.
Reeves said it was part of a “balanced approach” to inheritance rules.Elsewhere, the Chancellor decided to freeze Inheritance Tax thresholds at current levels until 2030.
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