His decision has unleashed a huge controversy, that is casting a shadow over some of the better measures announced in his Spring Budget.
Hunt has handed the Labour Party an open goal, by allowing them to claim he has delivered a massive tax break to the wealthy, while squeezing everybody else.
Labour loves accusing Tory chancellors of helping out their rich mates, so at first I scoffed Shadow Chancellor Rachel Reeves line of attack.
But the more I look at Hunt’s move, the more I see her point. Hunt has just given super-wealthy Britons a massive opportunity to fight back against his own inheritance tax squeeze, by allowing them to pump a small fortune into pensions.
And I mean massive. In the fight against the hated “death tax”, this is a nuclear-sized game changer.
It will allow high earners to hide hundreds of thousands of pounds away from the taxman, and they’d be daft not to take advantage.
On death, pension savings are just about the only asset that can be passed to loved ones free of inheritance tax (although they may pay income tax if you die from age 75).
Hunt’s decision to scrap the lifetime allowance has supercharged the benefits of saving in a pension, according to Dean Butler, managing director for customer at Standard Life.
“Families now have scope to pass on unlimited sums tax-efficiently”, he said, adding: “If pension beneficiaries leave the money untouched, it could cascade down across multiple generations.”
Was that what Hunt intended?
In the last few days, my inbox has filled up with emails from pension companies and wealth advisers, urging clients to take advantage of this once-in-a-lifetime opportunity.
I groaned when Reeves said she would reinstate it, as the uncertainty will make pension planning even more complex and confusing.
Yet Hunt has made it easy for Labour’s class warriors by simultaneously increasing the annual allowance, the amount we can save in a pension each year, from £40,000 to £60,000.
Most ordinary people cannot afford to save £40,000 into a pension, let alone £60,000.
So why did he do it?
Wealthy people now have a huge opportunity and should take it, according to Sean McCann, chartered financial planner at NFU Mutual. “From April, couples could shelter up to £120,000 a year from IHT, by contributing to a pension, and without fear of the pensions lifetime allowance.”
McCann calculates that if an individual paid £60,000 a year into a pension and it grew at four percent annually after charges, their pot could be worth £812,298 after 10 years.
This could them save a staggering £324,919 of IHT.
A couple who did the same would have pension of £1.62million and a staggering £649,838 potential IHT saving.
Again, is this what Hunt intended?
The Office for Budget Responsibility still expects inheritance tax receipts to rise in the next few years, but I know what that means in practice.
Most of the money will come from middle income Britons, who are increasingly the ones who pay IHT for two reasons.
First, rising house prices are pushing more people past the £325,000 threshold. Second, they don’t have clever advisers helping them avoid it.
The backlast against Hunt’s move will hit all of us. If pensions are seen as a massive IHT tax dodge for the rich, it could tempt Reeves to do more than restore the lifetime allowance.
She could make everybody’s pensions subject to IHT.
Plenty of people want to see this happen. Last December, the Institute for Fiscal Studies published a paper arguing that the overly generous tax treatment of pension pots at death needs to be swiftly ended.
Thanks to Hunt, that day has just moved closer.
Families have been handed a tax planning nuclear weapon today, and will be clamouring to use it.
Unfortunately, Labour has been handed an opportunity to go nuclear on our pensions, too.
If she does, we’ll know who to blame. Jeremy Hunt.
I bet he didn’t expect that.