The House of Lords Finance Bill Sub-Committee is currently invites contributions to its inquiry on the draft Finance Bill 2025-26.
The Sub-Committee will focus on the following provisions included in the draft Bill:
- Reforming inheritance tax: unused pension funds and death benefits
- Reforms to agricultural property relief and business property relief.
The Sub-Committee will consider the administration and implementation of these measures, rather than the rates or incidence of tax.
This inquiry seeks written answers to these questions:
Reforming inheritance tax: unused pension funds and death benefits
Identifying inheritance tax due
- How challenging will it be for personal representatives to identify and report inheritance tax due on unused pension funds and death benefits?
- What is your view of the Government’s proposals to ensure personal representatives can obtain the information they need from pension providers? How practicable is it?
Liquidity challenges
- How significant will liquidity challenges be for personal representatives paying inheritance tax due on unused pension funds and death benefits?
- How straightforward will it be for personal representatives to recover amounts in respect of inheritance tax from pension beneficiaries?
- What are your views on the Government’s suggestions as to how personal representatives can manage any liquidity challenges? How else could the Government support personal representatives who face liquidity challenges?
Impact
- Has the Government sufficiently taken into account the impact of the measure on personal representatives and pension schemes administrators?
Implementation and transition
- How aware of the proposals are those who may be affected by the proposed change? What more should the Government do to raise awareness ahead of April 2027?
- What are your views on the proposed timetable for the introduction of this measure? Do you think there should be any transitional provisions?
Reforms to agricultural property relief and business property relief
Identifying and funding inheritance tax due
- How easy will it be for those affected to report and make arrangements for funding the inheritance tax due, within the statutory six-month period?
- What issues, if any, might arise in relation to obtaining (and agreeing) valuations of qualifying business and agricultural property for inheritance tax purposes?
Impact
- What are your views on the government’s assessment of the impact of the changes, in terms of the number and type of estates which are affected? For example, do you think that smaller farms will be affected by the changes?
Implementation and transition
- Are farmers and business owners prepared for these changes, and what help or support might they need?
- How straightforward will it be for those eligible for the reliefs to identify how the proposed changes will impact their inheritance tax liability, in order that they can plan accordingly?
- What are your views on the proposed timetable for the introduction of these measures, and do you think there should be any transitional provisions?
Consultation on both measures
- What are your views on the consultation process the Government has followed in relation to each of these measures?
Lord Liddle, chair of the Finance Bill Sub-Committee, said: “In its draft Finance Bill, the Government is proposing a measure to bring unused pension funds and death benefits into the scope of Inheritance Tax. It is also making significant changes to agricultural property and business property reliefs.
“The Finance Bill Sub-Committee’s work does not look at the rates of tax proposed by the Government. Instead, it makes recommendations on how the Government’s tax policy can best be implemented and administered.
“These are important changes. To inform our work we want to hear from as broad a range of people and organisations as possible. If you have a view on any aspect of these proposals, please let us know what you think.”
The deadline for the submission of written evidence is 5pm on Tuesday 7 October 2025
Click here for more information on the inquiry, and details on how to submit evidence.
Punish the Prudent, Favour the Feckless
The Treasury has come up with another one of its Baldrick cunning plans. You know the sort: naïve, half-baked, and doomed from the start. This one involves dragging unused pensions and death benefits into inheritance tax and squeezing farmers and business owners at the same time.
Apparently, the thinking goes like this:
Spend it all? Fine.
Live recklessly? Fine.
Leave nothing behind? Fine.
Work hard, save carefully, provide for your family? Pay up.
Punish the prudent, favour the feckless.
The problem, as always, is that it’s economic self-harm dressed up as reform. Grab a few quid from the sensible middle, patch the hole in the public finances, and ignore the fact that the wound just gets deeper. More self-harm won’t heal anything — but that bit never seems to occur to them.
The truly rich will lawyer up. The reckless and the feckless have nothing left to tax. And the people who actually played by the rules will adapt in the only rational way: give assets away early, work less, earn less, maybe even die owing — because HMRC can chase you while you’re alive, but not once you’re gone.
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Not worth wasting time responding to this consultation. We’ve wasted a lot of time responding to the RRB and LAFRA, and regardless of numerous common sense amendments from the Lords, the government simpy ignored them.
I think Labour’s economically illiterate ideologues believe pensioners will take their money out sooner and spend it in the UK economy, while paying tax on what they drawdown, plus an extra 20% VAT on what they spend. Then 40% IHT on what’s left plus income tax from beneficiaries.
We won’t have much left to enjoy and pass on after 50 years of working and saving, but will do our best to spend it outside the UK and gift it to our children. That includes property.
Just a few months ago I wouldn’t have considered an annuity or equity release, but with a mission to thwart Reeves, everything is now up for discussion with my family and financial advisers.
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