Chancellor Rachel Reeves is increasing inheritance tax charges (Image: Getty)
Britons overwhelmingly support abolishing or cutting inheritance tax, according to a major new poll.
It is the most hated levy charged by the Government, considered to be unfair by more people than any other form of taxation.
The findings were published after inheritance tax receipts reached record highs, with £6.3billion paid in the nine months to January — up from £5.7billion in the same period in the previous year.
There is growing concern about changes announced by Chancellor Rachel Reeves which mean the number of bereaved families forced to pay will almost double.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “The British public clearly recognise that inheritance tax is an almost uniquely bad tax, given their unanimous support for cutting or abolishing it altogether.
“While there are certain reforms — such as lifting thresholds — that could ease some of the pain, it’s becoming increasingly clear that the only acceptable solution in the long term is complete abolition.”
Joanna Marchong investigations campaign manager at the TaxPayers’ Alliance
It’s time to abolish the inheritance tax. For decades, grieving families have been saddled with this unjust grief tax, which has punished success and undermined the British values of hard work and savings.
It has turned what should be a legacy into a financial burden for children and grandchildren.
What’s even more striking is how universal the call for change is. Public sentiment is clear and united. Whether young or old, male or female, Conservative or Labour-leaning, there is overwhelming support for scrapping this outdated tax.
Additionally, nearly half of those asked in polling conducted for us at the TaxPayers’ Alliance listed inheritance tax as the most unfair out of nine major taxes, far ahead of income tax or VAT.
And who can blame them? Families who have worked tirelessly to build businesses and accumulate assets shouldn’t be penalised with double taxation on the fruits of their labour. But under the current rules, that’s exactly what happens.
The numbers paint a clear picture. Inheritance tax receipts have surged, with the Treasury collecting £600 million more in the past nine months than the previous year.
The government may view this as a jackpot, but it is actually a financial noose for families during one of the most difficult times in their lives.
The system is cruel and unworkable. Many families facing steep tax bills are forced to sell or break up their businesses just to meet their obligations.
Resulting in the undermining of the very fabric of local economies and leaving hardworking families to bear the brunt of an unfair and outdated tax system.
That’s why the TaxPayers’ Alliance is launching a new campaign to abolish inheritance tax, including a petition and a tool to write to your MP. It’s time for the government to listen to the people who put them in power and scrap this unfair tax once and for all.
Polling for the TaxPayers’ Alliance by Public First found that 55% support either abolishing or cutting inheritance tax, with 28% of those surveyed saying it should be axed entirely.
Asked to choose the three most unfair taxes, 46% said inheritance tax with income tax second. That was named by 27%, while 26% named stamp duty paid on property purchases.
Inheritance tax is unpopular across all age groups. In total, 53% of people aged 18-24 want it cut or axed, along with 57% of over-65s.
However, the number of estates liable for the tax is set to increase significantly.
Changes introduced by Ms Reeves will almost double the proportion of estates paying death duties. The share paying will go up from 5.2% of estates in the 2023-24 financial year to 9.5% in 2029-30.
An additional £2.5billion will be handed to the Treasury by bereaved families by 2029-30, according to the Office for Budget Responsibility.
It means the Treasury is expected to receive £13.9billion from inheritance tax in 2029-30.
Attention has focused on the decision to make family farms liable for inheritance tax, but this is just one of the Chancellor’s Budget changes.
An extra £1.5billion annually will come from her decision to make unspent pension pots liable for inheritance tax for the first time.
This will affect people who save into defined contribution pension schemes while they work but fail to spend all the money before they die.
Pensions expert Ros Altmann warned that the policy will be “disastrous” because people will be “incentivised to take the money out as quickly as possible to avoid the draconian death taxes”.
She said: “More people will spend all their pension before they reach old age.”
The Budget also extended a freeze on inheritance tax thresholds for two years so they remain fixed until April 2030, which will make more estates liable.
The Treasury says it is “making the inheritance tax system fairer by ensuring that wealthy estates contribute more to the public finances.”
Inheritance tax is applied at a flat rate of 40% on estates worth over £325,000. However, anything left to a spouse or civil partner is exempt, and the allowance can be increased to £500,000 if it includes the value of a family home.
The complex rules mean that in some cases a couple can pass on £1million tax-free if the estate includes a home.
