Sunak to revamp inheritance tax rates ahead of the next election

Rishi Sunak is expected to look at changing unpopular inheritance tax rates ahead of the next general election. Ministers claim the Prime Minister will consider reforms to death levies as part of a pre-poll giveaway. Taxes kick in on estates worth more than £325,000, which impacts more and more people as house prices rise.

The 40 percent tax is imposed on everything above the threshold.

Dan Neidle, founder of Tax Policy Associates, said the most wealthy use loopholes to avoid paying the levy.

He added: “The upper-middle class pay a high 40 percent rate. The seriously wealthy use the generous swathe of exemptions and loopholes to pay little or nothing. The answer is to cut the loopholes and also cut the rate.

“If that’s what Sunak is planning – great. If it’s just a tax cut, leaving all the loopholes in place, not so great.”

Two ministers told Bloomberg Mr Sunak wants to make the offer ahead of the election.

Although only four percent of deaths trigger inheritance tax payments, the levy is viewed by many as deeply unfair.

A recent YouGov poll found that 63 percent of the public want the threshold to be raised to take more people out of paying it.

The figure increases to 77 percent among Conservative voters.

Reforming the tax is likely to be very popular in the south east seats where high prices are high and Tories are facing a tough battle from the Liberal Democrats.

One minister also believes it would help reduce Labour’s poll lead and wants the change announced at the Conservative Party conference in autumn.

In August last year when he was vying to become Conservative leader, Mr Sunak hinted he would abolish the tax if he won.

Mr Sunak said: “I’ve set out a plan to consistently cut income tax over time because I want to reward hard work. But I very much, as you heard from my earlier remarks, I’m someone who believes in supporting aspiration.

“I think that is a Conservative value that many of us in this room will hold dear and inheritance tax is a way to do that.

“So, over time, is that something that we should look at? Of course we should, because people who are working hard should be rewarded for that.

“If they want to build something and leave that for their family, that’s an entirely Conservative instinct and a Government that I’m privileged to lead would very much want to support that instinct. That’s what a Conservative prime minister should do.”

A Downing Street source yesterday (SUN) insisted that the Prime Minister is “not thinking or looking into any” tax policies at the moment.

The insider said: “We have only just had a budget and our main priority is tackling inflation.”

Source: Read Full Article