"Families across the UK are already stretched by frozen thresholds, rising asset values, and steadily increasing fiscal drag, and that any attempt to worsen the position would be a political and economic misjudgement of remarkable scale. Inheritance tax is already regarded as the most-hated tax in the country. People accept income tax. They accept VAT. They even tolerate capital gains tax. They even tolerate capital gains tax. They even tolerate capital gains tax."
"If the allowance had kept pace with inflation, it would be comfortably above £500,000. People know that. They see their parents' homes worth more. They see their pensions worth more. They see the Treasury benefiting from a threshold that refuses to move. This is not a tax on the rich anymore. This is a tax on households who never imagined they would face it."
Altering inheritance tax thresholds now would trigger an intense public backlash. Frozen nil-rate bands since 2009, rising house prices and asset values, and inflation have eroded real allowances and pushed more families into the tax net. Inheritance tax is increasingly viewed as unfair because it can fall on households after a lifetime of tax contributions. If the threshold had tracked inflation it would be well above current levels, concentrating benefits in the Treasury while burdening ordinary households. Forecasts show inheritance tax revenues climbing to historically high levels, increasing the risk of wider political and economic fallout.
Read at London Business News | Londonlovesbusiness.com
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