Inheritance tax receipts are set to double within five years, a new report has warned – as polling revealed public support for Tory plans to cut it.
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polling → set → it
A study by the think tank Onward reveals that the taxman is expected to take £15 billion in inheritance tax by 2031 – up from £7 billion last year – unless urgent reforms are introduced.
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reforms → reveal → billion
Kemi Badenoch electrified the Conservative Party conference on Wednesday by unveiling radical plans to slash the hated tax.
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Badenoch → electrify → tax
Tory reforms would exempt the family home from inheritance tax, regardless of its value.
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reforms → exempt → value
Mrs Badenoch also announced plans to allow couples to pass on an additional £1 million in assets tax-free, slashing the number of families who would be hit by the death tax.
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who → announce → tax
The Tory leader said the desire to pass on the family home 'is one of the most human instincts of all' and should not be preyed on by the taxman.
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desire → say → taxman
New polling by YouGov found the public back the Tory plan to exempt the family home from inheritance tax by a margin of 61:18.
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public → find → 61:18
The survey of more than 6,000 adults found support strongest among Conservative and Reform supporters, with 85 per cent of Tory voters in favour.
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cent → find → favour
But it also revealed strong support among Lib Dem voters, who the Conservatives are trying to win over and who backed the idea by 61:22.
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who → reveal → 61:22
Even Labour and Green voters support the idea, with Labour supporters backing it by 48:30.
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supporters → support → 48:30
Some critics of the plan have argued that the policy would unfairly benefit voters in London and the south where house prices are higher.
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prices → argue → London
But the polling shows support for exempting the family home in all parts of the country.
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polling → show → country
In the north, the idea was backed by a margin of 57:19.
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idea → back → 57:19
Tax cut: Kemi Badenoch said the Tories would exempt the family home from death duties
The new report by Onward reveals a sharp rise in the impact of inheritance tax.
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HMRC data shows that receipts rose to a record £7 billion, partly as a result of a longstanding freeze in the threshold for paying it, which Labour has now extended until at least 2031.
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Labour → show → 2031
But receipts are due to rise even more quickly in the coming years because of other changes introduced by Labour, such as including some farmland for the first time and taking into account pension pots from next year.
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receipts → rise → year
Inheritance tax receipts are now set to jump to £12.6 billion by 2030, when an estimated 52,000 estates will be hit.
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estates → set → 2030
This equates to around one in 12 of all estates – three times the proportion hit in 2009 when the current threshold was set.
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threshold → equate → 2009
The following year, revenues are expected to hit £15 billion – double the current level.
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revenues → expect → billion
Shadow chancellor Andrew Griffith said: 'Inheritance tax was meant to be a tax for the super rich.
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But it has ended up being a tax on Middle England.
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it → end → England
And under Labour, more and more families are being dragged into the net.
'
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families → drag → net
We have been clear: under the Conservatives there will be no stamp duty when you buy your home, no 'Mansion Tax' when you live in it, and no inheritance tax when you pass it on to your family.
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you → buy → family
And each couple will be able to leave a further £1 million of inheritance free.
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couple → leave → inheritance
'Our changes will take more than half of people currently liable for inheritance tax out of paying it altogether, and save many more families from paying it in the future.
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changes → take → future
The Conservatives believe you should get to keep more of what you earn.
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you → believe → what
Labour want to take more of your money and spend it on welfare.'
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Labour → want → welfare
The Tory plans are forecast to cost £6 billion a year, funded mainly by cuts to welfare.
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plans → forecast → welfare
But some economists warned the plan could end up costing significantly more if it incentivises older people to pile their assets into property in later life.
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it → warn → life
Dan Neidle, of Tax Policy Associates, said it would create a 'perverse incentive' for older people to 'upsize' their property to avoid inheritance tax.
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people → say → tax
He said the final cost of the policy was likely to be between £7.7 billion and £10.9 billion.
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cost → say → policy
Tory sources played down the warning, saying that most people with enough assets to be caught by the proposed thresholds are already using tax lawyers and accountants to shelter their wealth from death duties.
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people → play → duties
Under current rules, individuals can leave £325,000 in assets tax-free, with a further £175,000 if the family home is involved.
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home → leave → 175,000
Couples can leave a total of £1 million before the taxman takes a slice.
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taxman → leave → slice
The Conservative plans will see the family home exempted completely.
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home → see → ?
Individuals will also be able to leave a further £500,000 in assets tax-free, allowing couples to leave £1 million on top of the family home.
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couples → leave → home
The Aporia
