The Tories are afraid.
Very afraid.
It’s taken them a while to realise that when Labour are polling 18% ahead of them, something is amiss. Moreover, the results of the three by-elections speak for themselves and MPs in precarious seats are updating their CVs. No wonder the Conservatives are grubbing around for scraps they can throw the Electorate. One such tasty morsel is that of ditching inheritance Tax.
Described by Labour politician Roy Jenkins (1920 – 2003) as ”…a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue” it’s routinely cited by Conservative voters as the least popular tax (as if there was ever such a thing as a desirable one).
It ranks somewhere below a bout of dysentery and being trapped in a lift with Rachel Reeves. Kicking its sorry backside to the economic kerb would mark Rishi’s Reprobates out as proper conservatives that allow us mere citizens to keep our own money – now there’s a radical idea.
A Loathsome Predator
The loathsome predator attacks its victims twice over. John O’Connell chief executive of the TaxPayers’ Alliance commented that the ‘death tax’ was “…unfair, unpopular and immoral and has a detrimental impact on economic decision-making through an endless list of exemptions”.
Australia, New Zealand and Israel have already ditched their hated IHT, realising that it crimps middle-class aspirations and just sends entrepreneurs and wealth scuttling off somewhere more agreeable.
While those countries are ‘getting on with it’ economically, the Tories have been chewing over the idea since 2019, when Sajid Javid hinted that scrapping IHT was “…on his mind”. Well, that’s nice.
Frankly, we’ve been down that platitudinous path before, because like nuclear fusion, time travel and the revocation of Stamp Duty, those four years haven’t arrived. It remains to be seen whether the Tories will deliver, or whether it’s an empty manifesto bribe.
Majoring in on Minor Things
It seems the government is majoring in minor things. What’s wrong with the ability of families being able to leave their estate to their beneficiaries so that the money can be used to buy property, or anything else they fancy? The innumerate Treasury would earn considerable taxes on this consumption and will recoup some of this lost tax as the capital re-circulates into the system. At only £7 billion in receipts, the tax is barely enough to cover Therese Coffey’s cigar money and getting rid of it would earn the government a host of ‘likes’.
For example, Glentree is dealing with a number of elderly people who have sold their family house and are choosing to rent an alternative home on a long-term basis, to avoid the grievous financial harm of IHT.
The quid pro quo of giving away any tax-free capital growth (if there is any) is that the upkeep of this property becomes the responsibility of the landlord. More importantly, it keeps any private, hard-earned wealth out of the thieving hands of the next Labour Party, who like all good socialists, want to tax everything at a minimum of 100%.
By these people not purchasing an alternative property, the Exchequer is denied Stamp Duty. However, if there was no Inheritance tax this circumnavigation would not occur in the first place. It seems that whoever is Chancellor needs a Laffer Curve wrapped around their neck and pulled tight.
Raising the Threshold
Another idea is to raise the threshold that triggers Inheritance Tax from the £650,000 (for a couple) so that only the super-wealthy have to empty one of their offshore accounts. This would rake in more readies for HMRC and would please the baying mob of lefties that want to eat the rich for breakfast after stealing all their assets.
In fact, it was Boy George Osborne who did something right for once (literally) and tried to introduce this plan. Unfortunately, this was reversed in subsequent budgets as the Tories transitioned to Blaironomics.
Property Market Being Walloped
At present, the residential property market is being walloped by the interest-rate thugs at the Bank of England. The Old (and increasingly batty) Lady of Threadneedle Street has imposed no less than 12 consecutive rate increases this year, raising it to 4.5% in May 2023. Ominously, borrowing costs are now at a stratospheric level not seen since the 2008 property catastrophe.
Ordinary people are battling Interest Rate hikes and the dramatic rises of mortgage interest loans, so any mitigation of the IHT would be a welcome bonus. It might also keep a few Tory MPs in their jobs.
Sunak, you have been warned!