Sean McCann, Chartered Financial Planner at NFU Mutual, comments on yesterday's pension announcements and their impact on inheritance tax savings.

The Chancellor has created an unlimited IHT shelter by abolishing pension lifetime allowance, according to NFU Mutual's Sean McCann.

From April, couples could shelter up to £120,000 a year from inheritance tax, depending on their earnings, by contributing to a pension.

Sean McCann, Chartered Financial Planner at NFU Mutual, said: 

Pensions are normally exempt from inheritance tax and are increasingly being used to hand money down to the next generation in a tax-efficient way.

By abolishing the pension lifetime allowance, the Chancellor has created an unlimited inheritance tax shelter for families.

The only restrictions in place are the Annual Allowance and your earnings. The Annual Allowance is increasing to £60,000 in April for those who have not taken a taxable payment from their pensions.

You will be able to invest up to the level of your earnings, capped at £60,000 per tax year. This means couples will be able to shelter up to £120,000 a year from inheritance tax, provided they both earn £60,000 or more.

The Office for Budget Responsibility still expect inheritance tax receipts to rise in the next few years, but this change to pensions will limit the increase.

Full release: Huge inheritance tax break – New pension rules allow couples to shelter unlimited funds from IHT at a rate up to £120,000 a year

✉️ Matt Wilson, NFU Mutual, 07890 255381 / matt_wilson@nfumutual.co.uk