There was an important announcement from the government on Monday, 21 July.
They’ve confirmed their intention to tighten the noose around pension inheritance rules.
The changes come into effect from April 2027, and while that might sound like a long way off, it’s really not, especially if you care about what your family keeps when you’re gone.
Here are our thoughts:
- For years, pensions have been a brilliantly tax-efficient way to pass on wealth. In many cases, they’ve escaped inheritance tax (IHT) entirely. That’s now under threat.
- From 2027, the protections that allowed pensions to sidestep IHT are being axed.
- Depending on your setup, you could be handing your heirs a 40% tax bill on what’s left in your pension.
The good news? There’s time to plan.
The bad news? That plan might involve paying more tax now to stop your family paying a whole lot more later.
That might mean:
- Taking pension income earlier (yes, even if you don’t “need” it).
- Repositioning assets out of pensions and into structures that still protect your estate.
- Using trusts, gifts, or other strategies to keep control while reducing your taxable footprint.
This won’t be right for everyone - but doing nothing could be the most expensive mistake.
We’ve already started working on different possible options to discuss with you, there won’t be a one-size-fits-all fix, and we will discuss further when we next meet.
This isn’t just about tax. It’s about protecting what you’ve built and making sure it ends up in the right hands.
So yes, April 2027 gives us time - but not time to waste.