By Research Director, Duncan Simpson.
YouGov polling in 2015 showed that no other tax was as unpopular: 59 per cent thought that inheritance tax was unfair. Though only a small minority of estates are subject to it, people’s aspirations to pass on their wealth to their children are attacked by its very existence.
Numerous breaks and exemptions exist in the inheritance tax system precisely because it is so punitive. There should not be a limitation to these. For instance, you’re currently able to gift £5,000 towards a child’s wedding and make payments to help with another person’s living costs, such as an elderly relative. Likewise, the tax on gifts made less than seven years before death is tapered to reduce your liability.
Such exemptions are important, but it’s true that they create complications in the system. The government’s ambition, therefore, should be to abolish this tax, or at least increase the nil-band threshold to £500,000 and halve of the rate to 20 per cent.
All families, wealthy or otherwise, should be given a break from this tax on grief.