In a recent interview with the Sunday Telegraph, UK shadow Chancellor of the Exchequer Rachel Reeves pledged not to introduce various taxes targeting the wealthy should the Labour Party win power. The purpose was clear: to reassure nervous voters ahead of this autumn’s crucial Mid Bedfordshire by-election and the next general election. Reeves, though, still has significant tools to target wealth, and inherited wealth in particular.

Due to various reforms since 2016, pensions have become very attractive vehicles for passing assets from one generation to the next. Unused pension pots are not subject to inheritance tax (IHT) upon death and, with the lifetime allowance being removed last April, there is currently no limit on the size of pot that can be passed on. It is therefore possible to shield a pension amounting to many millions of pounds from IHT.

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