{"id":100643,"date":"2024-12-28T14:33:24","date_gmt":"2024-12-28T14:33:24","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=100643"},"modified":"2024-12-28T14:33:26","modified_gmt":"2024-12-28T14:33:26","slug":"pension-contributions-inheritance-tax","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/pension-contributions-inheritance-tax\/","title":{"rendered":"How to Supercharge Pension Contributions Ahead of 2027 Inheritance Tax Changes"},"content":{"rendered":"\n

Changes to the United Kingdom’s inheritance tax (IHT)<\/strong> laws, announced in the 2024 Autumn Budget, will come into effect on April 6, 2027<\/strong>. These revisions could have a profound impact on pension death benefits<\/strong> and estate planning strategies<\/strong>. Experts are advising retirees to reevaluate their financial plans to mitigate potential tax liabilities and focus on building their retirement funds.<\/p>\n\n\n\n

Significant Shift in Inheritance Tax Rules<\/h2>\n\n\n\n

The new regulations will include most unused pension death benefits<\/a><\/strong> in estate calculations for IHT<\/strong> purposes. Under the current rules, pensions are typically exempt from IHT, allowing beneficiaries to inherit them tax-free. However, the proposed changes redefine how pensions are treated after death, posing potential challenges for retirees and their heirs.<\/p>\n\n\n\n

One Exception to the Rule<\/h3>\n\n\n\n

There is a notable exception to the impending changes : pensions transferred to a surviving spouse or civil partner will remain exempt from IHT, thanks to the existing spousal exemption. This provision ensures that pension contributions<\/strong> and retirement funds transferred within a marriage or civil partnership are unaffected by the new rules.<\/p>\n\n\n\n

Streamlined Process for Tax Calculation<\/h3>\n\n\n\n

Under the proposed system, pension providers and estate administrators will collaborate to calculate IHT<\/a> liabilities. An HMRC calculator<\/strong> will be employed to determine the applicable nil rate band<\/strong> and whether IHT is due.<\/p>\n\n\n\n