Half of Brits want to abolish IHT

Over half (56 per cent) of the British public now want a complete abolition of inheritance tax (IHT), compared to 54 per cent last year and 49 per cent two years ago, Kingsley Napley has found.

The law firm’s latest commissioned poll, conducted by YouGov, comes ahead of the Budget later this month, and amid speculation that Kemi Badenoch will include the abolition of IHT as part of her pledges at the Conservative Party conference this week.

Despite more people calling for the abolition of IHT, there has been a drop in opposition to an increase in the current 40 per cent rate at which IHT is levied.

Over seven in 10 (71 per cent) now oppose this idea, in contrast to 76 per cent of the British public surveyed last year.

There has also been stagnating support for raising the £325,000 threshold at which IHT must be paid. The majority (65 per cent) still supported this, compared to the 67 per cent recorded last year.

Kingsley Napley said there has been little change year-on-year in plans to take professional advice to reduce IHT liability, despite the fact that ever more estates are falling within the net.

Over three-quarters (78 per cent) have either not considered (73 per cent) or decided against (5 per cent) doing so, and only 15 per cent of those polled had either done so (5 per cent) or intended to do so (10 per cent).

The research comes ahead of the Autumn Budget, in which some are calling for the Chancellor to reverse his predecessor’s measures on business property relief and agricultural property relief targeting family firms.

The law firm added it has also been rumoured that the Chancellor may introduce a flat 10 per cent social care levy on all estates on death or look to scrap IHT altogether in favour of a more progressive wealth, property or land tax.

Kingsley Napley partner and head of private client, James Ward, stated: "There has been some political posturing on IHT in recent weeks given the unpopularity of this tax. Let's see what the Conservatives say at conference.

"However, personally I doubt Healey will go there on full abolition. He may introduce a few tweaks but I’m not convinced this government is yet ready on replacement ideas for this tax. Most likely his focus will be in other areas.”

"Whilst a majority want to scrap this tax, I always say be careful what you wish for,“ James continued.

“IHT is effectively this country’s wealth tax. Currently only one in 20 estates pay it and yes, it is viewed by many as a double tax on death after already paying dues in life.

"But given the pressure on state finances, the revenues would need to be found elsewhere and any alternative measures could be far more onerous, such as a yearly wealth tax.

"The other thing about the ‘devil-you-know’ is that it is possible to plan around the tax and reduce the effective rate of tax on your estate over time.

"Burnham’s ascension to PM this summer has caused many to revisit their estate planning and seize opportunities to gift out of excess income, set-up trusts or seek to benefit from potentially except transfers whilst there is still a window to do so."

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