Grieving families will lose the ability to claim loss reliefs on pensions due to changes in inheritance tax (IHT) rules starting April 2027. Unused pension pots will be included in an individual's estate for tax purposes, but unlike other assets, if pensions fall in value, family members will not be entitled to reclaim the difference in tax. Rachel Vahey from AJ Bell said: "Dragging unused pensions into the inheritance tax net was already a major blow for families, but HMRC's proposed approach risks making a bad policy even worse." Ms Vahey added: "HMRC's justification is hard to square. It says these reliefs should not apply because the pension saver does not own the pension assets, yet those same assets are being pulled into the saver's estate for IHT purposes." Olly Cheng, of Rathbones, adds: "This is a wealth tax under another name. If you want to tax wealth, you go after property and pensions."
