Inheritance tax blasted as ‘legalised theft’ in calls to abolish levy | Personal Finance | Finance

Inheritance tax (IHT) has been slammed by readers as “abhorrent and immoral” with more than nine in 10 calling for it to be abolished, a new poll has found.

IHT is a 40 percent levy imposed on the value of an individual’s property and assets exceeding £325,000.

Despite just seven percent of estates reaching this threshold, high inflation and interest rates mean more Britons could be affected by the tax in the future.

IHT receipts generated a record £7.1billion in 2022-23 but official forecasts published by HM Revenue & Customs last week showed that it could bring in £7.7 billion this financial year.

This is a hike on the Office for Budget Responsibility predictions in March which did not forecast IHT receipts to reach £7.8bn until 2027-28.

In a poll that ran from 2pm on Monday, June 26, to 4pm on Friday, June 30, asked readers: “Should inheritance tax be abolished?”

Overall, 2,053 votes were received with a staggering 93 percent of readers (1,914 people) answering “yes” it should be abolished. Whereas, six percent (125 people) said “no” and a further one percent (14 people) said they did not know.

In the comments left below the accompanying article, readers took part in a lively debate on IHT.

The majority of readers argued in favour of IHT being abolished, with username rastler describing it as “legalised theft”.

Another, username mriancox, wrote: “This tax is absolutely disgraceful, many people have been pulled into the net because of house prices and the fact that the ceiling rate has never been raised for years. Abolish it now!”

While username Worldwatcher took a more balance view, commenting: “Inheritance tax is an abhorrent and immoral tax on the dead, people that paid off their mortgages, saved for their retirement and invested wisely during their working lives – all from pre-taxed income! It must be banned.

“However, the Treasury does earn annually £7 billion in inheritance tax receipts which they spend on the general public and national services. Consequently, there will have to be a minor tax increase on every working/employed citizen to replace that lost income.”

The IHT threshold has remained unchanged since 2010-11 and last November Chancellor Jeremy Hunt extended the freeze for a further two years until 2027-28.

A minority of readers thought that IHT should remain, with username Queenb saying: “Passing wealth to your kids that they’ve done nothing for is a privilege and absolutely should be taxed.”

Username Naffoff said: “Inheritance tax is the worst kind of UK tax to be imposed on the hard-working UK people. However, some sort of tax should be imposed on those people who are of millionaire status and above, but not a hard tax.”

Tax and financial planning expert at Quilter, Rachael Griffin, explained: “While IHT is not the government’s most lucrative tax, it has increased significantly in recent years as frozen thresholds and higher house prices led to more people being caught by in its net. 

“Abolishing it altogether would punch a hole in the budget, compounding an already bleak economic outlook.”

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