Ndubuisi 'Andy' Egwim argues that pensions being included in an estate for inheritance tax if someone dies after age 75 creates perverse incentives (e.g., beneficiaries or carers might prefer death before 75 to avoid tax). He highlights second-order thinking about incentives and gives a hypothetical GP/family scenario.
Pensions are now included as part of your estate to be considered for inheritance tax if you pass after 75, which again asks. It makes me wonder about the level of second order thinking because I, I keep saying to people does that mean, okay, there's an incentive for the beneficiaries, there's an incentive for you or whoever it is to die before 75 because if you die before 75 then your pension falls outside your estate and there's no inheritance tax on it. But if you die after 75 your pension falls into your estate and as a GP I'll be looking out for people saying my dad is 74 now and he's sick and I'm not sure he needs a doctor. But this is a perverse incentive and I don't know if I'm the only one who has thought about it. When this was announced that was my first thought because that's how my mind works in life. Incentives, incentives, incentives.
