How an inheritance tax raid could work — and what you can do about it

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achel Reeves has already shown that she is not afraid to use inheritance tax as a revenue raiser. In her first budget, in October, the chancellor declared that from April 2027 pension savings would for the first time be pulled into the scope of inheritance tax — a change expected to raise billions for the Treasury.

Now, with an ever deepening fiscal shortfall ahead of the next autumn budget, the Treasury is again rumoured to be targeting inheritance tax. On the table are said to be plans to tighten the rules around lifetime transfers of wealth and to end many widely used exemptions.

It wouldn’t be the first time that a government has gone further than simply taxing estates after death. The capital transfer tax introduced by the Labour government in 1974 applied to lifetime gifts and inheritances, and was generally unpopular. It was replaced by today’s inheritance tax system in 1986. But with more estates falling into the inheritance net because of frozen tax-free allowances and decades of rising property values, the political calculation has changed.

• We all should worry about this underhand attack on wealth