Should pensions be liable for IHT?
One industry expert warns changing the rules would be 'particularly harsh and unjustified'.Pensions in the UK are largely exempt from inheritance tax (IHT), especially defined contribution (DC) schemes, because pots currently do not form part of a person's estate and are not factored in when calculating IHT liabilities.
But recent research from the Institute of Fiscal Studies (IFS) has suggested that the current system should be overhauled as retirees are increasingly looking to pass part of their pension pots on to their children and grandchildren.
Carl Emmerson, deputy director of the IFS, said that with DC schemes being IHT-exempt, beneficiaries managed to save thousands of pounds in tax on those 'death benefits'. A tax treatment he claimed to be "indefensibly generous".
Please link to International Adviser to read the full article by Cristian Angeloni