Depledge Strategic Wealth Management and Ansons Law have partnered to support clients with the “potentially disastrous” inclusion of unspent pension pots in inheritance tax (IHT) calculations.

The firms highlighted the IHT increases clients are set to face, with both organisations having seen a marked rise in estate and succession planning enquiries so far this year.

They noted that, in certain circumstances, when a 40 per cent IHT rate is applied alongside a 45 per cent income tax rate, the effective tax on an inherited £1m pension pot could be as high as 67 per cent.

The changes that will bring pensions into the scope of IHT will take effect from 6 April 2027.

Pensions have traditionally been one of the most tax-efficient ways to pass on wealth with no IHT payable, with the changes to remove a route many families assumed would pass on wealth intact.

“We are increasingly helping clients with estate planning, asset protection and long-term succession planning to safeguard their family's financial future,” said Ansons Law solicitor and managing director, Martin De Ridder.

"For some people, the changes in April 2027 will be potentially disastrous if they do not seek expert financial planning advice alongside sound legal counsel.

"A pension pot that can currently be inherited entirely tax-free could, in the worst case, suffer an effective tax rate of up to 67 per cent under the new rules.

“That’s a brutal shock if you’re not prepared, which is why we’re working with expert financial planners like Depledge to ensure our clients have a plan in place for when this IHT storm hits."

Depledge founder and managing director, Andrew Day., added: "Earlier this year we advised law firms to act now to help their clients prepare for the IHT change in April 2027, so we are encouraged to see Ansons Law showing leadership in this area.

“By working with law firms like Ansons, we are helping our clients put the right legal structures and financial plans in place to protect their families’ wealth. The message is: act now.”

This article originally appeared in our sister publication Wealth Investment News

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