Labour Urged to Introduce Inheritance Tax on Pension Funds

Rachel Reeves faces pressure to implement an inheritance tax on unspent defined contribution pension funds to fund spending pledges. Economists suggest taxing pension pots to align with other assets upon death, potentially raising £1-2bn by the decade's end. Additionally, Reeves is speculated to increase capital gains tax bands and eliminate the IHT exemption on unused pensions. This move could impact family businesses, potentially leading to substantial tax burdens and hindering business investments. Discussions on inheritance tax reforms, including higher rates and changes in capital gains assessment, are underway to align the UK with global practices and fund social care and housing pledges without income or VAT tax hikes.