From 6 April 2027, income tax on Saving income and Property income will be increased to 22%, 42% & 47% for basic, higher & additional tax payer respectively.
From 6 April 2027, most unused pension funds and death benefits will be included in a deceased person’s estate for Inheritance Tax (IHT) purposes.
This ends the previous exemption where pensions were typically free from IHT, meaning, unless exemptions apply, these assets will be taxed at 40%.
While there will be inheritance tax on the pension fund, any remaining death benefits will still be subject to income tax at the beneficiary’s marginal rate when they are paid out to the beneficiary (provided the pension holder was not under 75 when they died).