Inheritance Tax: Pensions

Lord Massey of Hampstead Excerpts

Monday 17th November 2025 Lords Chamber

[Lord Livermore (Lab)]

I presume the noble Baroness is referring to the proposal of the noble Baroness, Lady Altmann, for a flat tax, and it is very interesting that she raises that. Currently, fewer than 10% of estates will have an inheritance tax liability. If you put a flat tax on all pensions, you are asking 90% of estates to pay more so that 10% of estates can pay less. I do not consider that to be fair.

[Lord Massey of Hampstead (Con)]

My Lords, interest charges for late payments of tax are charged at 8% per annum and apply to estates after six months. Does the Minister agree that, given potential complications in finalising and executing wills, six months is rather short and that a longer grace period of at least one year should apply before interest charges are levied?

[Lord Livermore (Lab)]

I understand the point that the noble Lord raises. As I understand it, six months is standard within the tax system.