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Sunday, September 24, 2023

Same old Tories

How best to respond to a cost of living crisis? Well, if you are the Tory party then you introduce tax changes that will benefit your rich friends.

The Observer reports that Rishi Sunak is reportedly considering an inheritance tax cut as he attempts to woo voters and create dividing lines with Labour, which is comfortably ahead in the polls.

The paper says that the intention is to eventually scrap the levy altogether at a time when tax on earned income is significantly greater than that on unearned wealth:

At present, inheritance tax is charged at 40% for estates worth more than £325,000, with an extra £175,000 allowance towards a main residence if it is passed to children or grandchildren. A married couple can share their allowance, which means parents can pass on £1m to their children without any tax to pay.

The publication cited three sources who have said there is a “live discussion” at the highest level of government about reform of the levy.

Among the proposals under consideration is for Sunak to reduce the 40% rate in the budget in March, paving the way to abolish it in future years, the paper said.

A senior government source said: “No 10 political advisers have been looking at abolishing inheritance tax as something that might go in the manifesto. It’s not something we can afford to do yet.”

They added that it was the “most hated tax” in Britain, according to polls. “It’s the most hated tax at every income [level],” said the source. “People also feel it is just wrong to tax people on income that has already been taxed – and at a time when they are grieving.”

The latest figures, for the tax year 2020-21, showed only 3.73% of UK deaths resulted in an inheritance tax charge.

All tax is hated but to claim that the most hated is inheritance tax, when it affects so few people, has to call into question who these Tories are talking to. Perhaps they should leave the cocktail parties behind and get out on doorsteps where they can meet ordinary people.
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