As debate intensifies over the future of the pensions triple lock, UK inheritance tax (IHT) receipts are forecast to soar from £8.5 billion in 2025-26 to £14.3 billion in the next four years. Much of this increase results from the freezing of the £325,000 nil rate in 2009. This allowance will stay frozen until 2030. Meanwhile those two decades have seen rises in pensions, savings and property value that have dragged an increasing number of relatively ordinary estates into the 40% IHT bracket, which was once a concern of the significantly wealthy. And from April 2027, unused pension funds will subject to the scope of the tax for the first time, lumped in with the rest of a deceased person’s estate and taxed at the same level. Compared with the overall tax take of £937.8 billion in 2025-26 year it is small beer, of course, but the failure of many commentators and and politicians to set out the full arguments of the claimed unfair bias towards the silver generations must add to their frustration. For example, just as one recent report on the sustainability of the triple lock described it as a “benefit”, omitting to note that older Britons have paid national insurance for most of the lives, IHT remains, to some extent at least, a tax on income already taxed. It also increasingly removes genuine benefits from families of modest wealth. Nor should not be forgotten that many of those whose estates will be subject to the tax have upped the value of their homes over the years through expensive enhancements that have poured (taxed) money into the economy – and created employment. None of this is to suggest the debates should be stifled, but silvers will hope justifiably that they are not simply regarded as fair game.
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