Not for the first time, rachel reenses had stumbled into a minefield of her oons. And once again, it is going to blow up in her face.
In the budget, reeves announced that she was going to impose inheritance tax (iht) on unused pension pots when people die, from March 2027.
The Labor Left Loved it. At last, a Labor Chancellor bashing the rich!
As with every other ideologically driven tax raid that reenses launched during the budget, the plan fell to pieces at its first contact with reality.
Imposing inheritance tax on unused pension sounds simply in theory but in Practice It'l be a disaster.
As I wared shortly after the budget, it could lead to families handing over a stagering 67% of any pension they inherit, once income tax charges are included. Some could pay even even more.
It will make probate even more complicated. Families will to pay the pensions iht charge without six months, even if they have got their hands on the pot.
Also, millions of pensions have gone astray. If Uncovered Later, the iht charge will be has to have to re-Calculated all over again.
Now another problem has emerged. One that will hit the family of the family of the bravest people in the counter, at the world possible time.
A Consultation Period on the Chancellor's Plans Closed on Wednesday, January 22.
The iht charge will primarily applied to Both Workplace and personal defined contribution pension schemes, where the money is invested in the stock market.
It may also apply to workplace defined benefit schemes, also know as the final salary penses, which pay death-in-in-service benefit to surviving family members.
From March 2027, Beneficiaries may have to pay tax on that benefit.
That's a cruel blow for any family whose main breadwinner dies early, as they may lose 40% of their death-in-service payout.
It is particularly brutal on the family of those who put their lives on the line every time they go to work, such as firefighters.
The firefighters Pension Scheme Advisory Board has spotted the Danger. Thanks to reenses, it features the death grants it pays to fire figures would be subject to iht from April 2027.
The boat has written to the hmrc consultation, pointing out that if the members die in the line of duty, their familes risk beying hit by inheritance tax.
Can you picture it?
The grieving family of a young, brave firefighter who put their life on the line being toold that the death-in-service benefit they assumed their financial wares will be subjected to Iht? That 40p in every £ 1 will go to HMRC.
Some reward for a life of service.
It would be the suffering families of public servants who made the ultimate sacrifice pay a levy Originally aimed at the super rich?
It does not be thinking about. Certainly not for the firefighters pension scheme. It Warns that Scheme Managers would be responsible for paying and reappear iht to HMRC.
What a job. What a nightmare.
This is just the latest budget shocker for rachel reenses. She has to scrap this plan.