UK households warned 'secret' HMRC tax grab of '91 per cent' is coming

An inheritance tax raid could see UK households pay an eye-watering 91 per cent triple whammy tax. People are at risk of falling foul of a secret HMRC 91 per cent tax grab from Labour Party Chancellor Rachel Reeves following recent reforms unveiled in her Autumn Statement.

Pension pots will now be liable to pay inheritance tax (IHT) in two years' time following a shake-up from Ms Reeves. Chartered financial planner Pete Matthew, the founder of Meaningful Money, is warning of the "triple whammy" tax raid.

Anyone who adds their pension fund into their estate and sees its value cross over the £2m threshold, are in the firing line of a potential "triple whammy" tax raid in only a few years time, after Ms Reeves' shake up at the end of October.

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The Meaningful Money host highlighted that executors will have to work alongside pension schemes "closely and quickly" to ensure that any calculation is done on time to avoid potential interest payments. On the potential tax charge, Matthew said: "Assuming it is decent sized pension pot and your beneficiaries draw it out on one go, worst case you are looking at 40 per cent IHT and a further 45 per cent income tax charge of what is left. 48 per cent if you are in Scotland.

"Add all that tax together and you get a notional rate of about 67 per cent."This "triple whammy" refers to someone paying inheritance tax on their pension, paying IHT on more of their non-pension money because of the reduction in the residence nil-rate band and their beneficiaries paying income tax on up to 45 per cent of what is left; 48 per cent in Scotland.

"I kid you not, I have seen calculations where the notional tax rate on a pension fund is 89 per cent or 91 per cent in Scotland," Matthew said. "One thing is certain, estate planning and lifetime planning is going to become much more nuanced and complicated."