Jon Golding looks at tax implications of the Labour Government's proposed revisions on the taxing of pensions in the UK.
Some years ago, the then Chancellor George Osborne surprised everyone by announcing that the 55% tax rate deduction, which applied to pension pot withdrawals by savers, was to be inheritance tax (IHT)-free. That measure came into force in April 2015 alongside other pension reforms outlined in the budget earlier that year.
Savers of pension funds were therefore suddenly able to pass on their unused pension pots to beneficiaries IHT-free after death before 75 years of age. From the age of 75 and above, the beneficiary would have tax deducted by the pension scheme administrator (PSA) at the beneficiary’s marginal rate of tax before receiving income. This change made pension funds an IHT&
