Rachel Reeves’ Refusal to Extend Inheritance Tax Payment Deadline Criticized as ‘Inhumane’
The UK Treasury has faced strong backlash after rejecting calls to extend the inheritance tax payment deadline for grieving families. Despite recommendations from the Economic Affairs Committee to extend the deadline from six to twelve months, Treasury officials have confirmed they will not change the current policy.
Deputy Chancellor Dan Tomlinson defended the decision, stating that the government aims to ensure swift and efficient tax collection, and has no plans to alter the existing six-month deadline. This move has sparked widespread criticism, with experts describing it as “inhumane” given the emotional and financial strain on families who are already dealing with the loss of loved ones.
Steve Webb, a former pension expert, expressed concerns over the lack of consideration for the human aspect, stating, “Six months won’t make a difference to the government, but it could provide much-needed relief to grieving families.”
The deadline has led to difficulties for many families, as they must complete complex processes involving pension valuations and beneficiary details before making payment. For some, the process can be delayed further due to the time needed to locate multiple pension funds or handle multiple legal representatives.
In response to the government’s decision, financial experts have warned that many executors may face financial difficulties as they struggle to meet the inheritance tax deadline. Rachel Vahey from AJ Bell highlighted the financial strain, pointing out that beneficiaries could end up paying significant interest fees due to delayed payments.
The new inheritance tax rules, set to take effect in April 2027, will include pension assets in the taxable estate, potentially impacting families’ financial security. With the threshold for inheritance tax increasing from £325,000 to £500,000 for some properties, the shift has already raised concerns about how it will affect those relying on inherited pensions.
