Chancellor Jeremy Hunt should abolish inheritance tax, the “most despised tax,” in the Autumn Statement this month, says CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations.
Nigel Green of deVere Group is calling on the Chancellor to take the bold measure ahead as he prepares to deliver the highly anticipated Autumn Statement on November 22.
The CEO comments: “Now is the right time for Chancellor Jeremy Hunt to take decisive action and abolish inheritance tax (IHT)
“With the Office for Budget Responsibility confirming that there’s been a turnaround in the Treasury’s coffers, which are now around £5.5 billion in the black, and with government borrowing falling and the income from tax increasing, there’s really no better time to scrap the most hated tax of all.
“While Jeremy Hunt will argue that he can’t make personal tax cuts that would push more money into the economy as the effort is still on to fight inflation, this is something that he can do.
“It would also be a hugely popular, vote-winning strategy.”
IHT is often dubbed the most despised tax, as frozen tax thresholds and an incredibly high rate of 40% place more and more ordinary families at risk of being taxed.
The number of homes facing the IHT burden has more than doubled since 2010, despite it being designed as a tax for only the super wealthy, and around 40% of homes sold in England and Wales in 2022 were worth more than the basic allowance.
“IHT is very obviously no longer just for the super-wealthy, as it was originally intended. It’s increasingly impacting middle-class families whose main asset is their family home,” says Nigel Green.
Leaving a legacy to loved ones is a “very human instinct”, and people feel “especially aggrieved by this form of tax [IHT] because it is, in effect, a form of double taxation as tax is being paid on assets which have already been paid for and previously taxed.”
In May this year, a new survey from deVere Group revealed that 72% of people aged 50-plus and with taxable assets did not know the IHT threshold was £325,000.
At the time, the CEO was quoted as saying: “It’s very worrying that those with assets that could be raided by IHT had a lack of understanding about what is likely to happen.
“It puts these people’s families at risk of being hit with an unexpected, and potentially considerable, tax bill at the point of the death of a loved one.
“It’s even more troublesome as, in our experience, people feel so strongly about inheritance tax. They loathe the idea of money that they’ve already paid tax on being taxed yet again.”
Looking ahead to the Autumn Budget 2023, Nigel Green concludes: “Jeremy Hunt must seize this opportunity now and scrap this hated tax once and for all.”