LCP comments on House of Lords report making string of recommendations on Inheritance Tax

The Chancellor is imposing inheritance tax (IHT) on unused pension assets and death benefits for deaths on or after 6 April 2027.

The House of Lords economic affairs select committee, having taken evidence from experts has published a string of recommendations. That evidence included written evidence from LCP and oral evidence from LCP Partner, Sir Steve Webb.

Commenting, Sir Steve Webb said: “As I set out in my evidence to the House of Lords, applying IHT to pension assets will create a significant burden on bereaved family members needing to settle their loved one’s estate. With more than 30 recommendations for the Government from the committee it is clear they share my concerns. It’s really important for any tax measures to be fair and practical to administer. There is a real risk the current proposals set unrealistic deadlines and cause delay in the payment of benefits at a vital time for dependants.”

Alasdair Mayes, LCP Partner and Head of Pensions Tax added: “The select committee is making lots of practical suggestions to streamline the process for everyone involved. Some, like providing access to pensions dashboards and the Government’s “Tell us once” service may well take time to arrange. In the meantime the committee’s recommendation to give more time to pay any tax that is due and have a two year “soft landing” period where interest and late payment penalties are applied with leniency are really practical solutions which we whole heartedly support.”