Family Investment Companies & Partnerships - Latest Insights

The inheritance tax treatment of pension wealth has undergone a fundamental and far-reaching change. Following the latest Budget, there has been a collective sense of relief that some of the more extreme measures trailed in advance — wealth taxes, exit charges and similar proposals — did not ultimately make their way into legislation. However, that relief should not be mistaken for a return to the status quo. While confidence was undoubtedly damaged by the pre-Budget whispering campaign and selective leaks, the reality is that one of the most significant changes to long-established estate planning assumptions has already been set in motion: pensions are no longer sacrosanct from inheritance tax.

Today’s Budget confirmed what many suspected after the OBR’s unprecedented early leak: a statement built around higher taxation of income from assets, tighter anti-avoidance measures and welfare reforms, with comparatively modest measures aimed at stimulating long-term growth.