Pensions tax raid could hit family firms

Experts have warned that higher inheritance tax bills could see thousands of family businesses struggle or even collapse. As of 2027, unspent pensions will be dragged into the inheritance tax net and accountants have warned that this will hit businesses that run their own individual pension schemes. The move will also mean many families will see bills of up to 67% when inheritance tax and income tax are both payable, while some could pay over 90%. Gary Smith of Evelyn Partners said the changes are “indirectly a further attack on business owners,” who have already seen an increase in National Insurance contributions and their shares become subject to inheritance tax as of April 2026. A Treasury spokesman said: “We continue to incentivise pensions savings for their intended purpose – of funding retirement instead of them being openly used as a vehicle to transfer wealth – and more than 90% of estates each year will continue to pay no inheritance tax after these and other changes.”