Last week, Liz Truss proclaimed: “Our tax system in Britain isn’t working, it is too complicated” I completely agree with Truss’ sentiment around the complexity of the UK tax system, but is completely abolishing a tax a sensible solution? 🖋️ nimshah14
But if you abolish Inheritance Tax, the Government presumably needs to replace it with something else or increase other taxes to reflect that there would be no tax levied on a person’s death. To balance the books, the Government would need to look at reducing the state pension by 7 per cent or increase Income Tax rates by 1 per cent, or possibly both.
To put Inheritance Tax receipts into context, the Labour Party’s proposal to abolish the non-dom tax status claims to generate £3.2 billion per annum which would apparently pay for 7,500 more doctors and 10,000 more nurses and mid-wives a year. Abolishing Inheritance Tax without a back-up plan is not viable in my view, but the current system isn’t working and overhauling Inheritance Tax, alongside the wider capital taxes regime needs to be considered to achieve the policy objectives. Here are my three suggestions for the Government to reform Inheritance Tax.
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