IFS calls for overhaul of favourable IHT/pensions position

Institute says reforms could raise revenue and cut income tax avoidance

Martin Richmond
clock • 3 min read

An overhaul to the tax treatment of pension pots after death would improve the fairness of the taxation system, according to the Institute for Fiscal Studies (IFS).

The IFS's Death and taxes and pensions report - published today (15 December) - found defined contribution pensions are being increasingly used by savers to bequeath their retirement savings after death. The research found if all pension funds which remained in pots after death were subjected to a basic rate of income tax, combined with a minimum rate of income tax on withdrawals, this could prevent pension funds withdrawn by non-income taxpayers from avoiding paying income tax. The institute has called for pensions to be included in the value of estates at death for the purpose of IH...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax planning

Safeguarding clients in a world of increasing HMRC activity

Safeguarding clients in a world of increasing HMRC activity

'It is important that financial advisers stay informed and proactive'

Louisa Beciri and Tom Lewis
clock 23 April 2025 • 4 min read
IHT receipts swell to record £8.2bn for 2024/25

IHT receipts swell to record £8.2bn for 2024/25

10% higher than last year, commentators note

Jen Frost
clock 23 April 2025 • 2 min read
HMRC gears up for an increase in criminal investigations

HMRC gears up for an increase in criminal investigations

'Criminal investigations are reserved for the most egregious cases'

John Hood
clock 17 April 2025 • 4 min read