Insights and Analysis:Cartwright published in Pensions Age

Arash Nasri, Pension Trusts senior investment consultant at Cartwright, shares this thoughts on the government’s plans to include pensions in the scope of inheritance tax.

Caught in the net

The government has said that it expects most estates to not meet the requirements for IHT to apply. However, inheritance tax receipts are still expected to hit c.£14 billion by 2030, Cartwright Pension Trusts senior investment consultant, Arash Nasri, says. “Government numbers indicate that the pension IHT rule changes will cause a further 10,500 estates to become liable to some level of inheritance tax for the year 2027/8. This is against the backdrop of c.213,000 estates with some level of inheritable pension wealth. In effect, an approximate extra 5 per cent of estates with any pension assets to inherit will now pay some IHT. This is in addition to the c39,000 estates which are liable for IHT anyway; and which will now pay more,” he states.

Mayes highlights how HMRC predicts that the first few years of the IHT change will raise less than £1.5 billion per annum. “However, we expect the impact to be significant in the medium term, raising twice that each year, and the revenue to the Exchequer over the next 20 years could easily be in excess of £40 billion,” he adds.