Global Britain, May 13, Catherine McBride
INHERITANCE TAX is not only double taxation on the middle classes, it is an expensive and ineffective way of raising government revenue. With the cost borne primarily by the grieving, who have enough to occupy them without additional paperwork and valuations to appease the avaricious taxation office.
Most people assume that inheritance tax is breaking-up the grand estates in the UK and originally when introduced it possibly achieved that aim. Now, however, most extremely wealthy people in the UK have found ways to minimise any inheritance tax due. Instead, inheritance tax has become a middle-class tax on assets bought using earnings that have already been taxed. This is double taxation.
Improvements to a property will normally attract VAT, paid out of earnings that have already paid tax, that makes inheritance tax a triple taxation on items such as double glazing, conservatories and solar heating.
According to HMRC, in 2019-2020, 90% of estates paying inheritance tax had net assets worth £1 million or less, mostly held in residential property and cash, and the average tax paid was £216,000. This is hardly “taxing the rich”.
So, why is our government claiming it wants to ‘level up’ the country when it is also taxing (at 40%) the small amount of capital most people on PAYE will ever amass? Unfortunately, most people working for a fixed wage are just making enough to pay their bills, so they can never amass the capital required to start a business or buy their own house. Inherited wealth is one of the primary sources of seed capital for new businesses. But if there are several beneficiaries there may not be much left after the government has taken its ‘unearned’ income.
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