The constituency most opposed to inheritance tax... and it doesn't vote Tory
Voters in the parliamentary seat of one of Labour's most prominent left-wing MPs are least supportive of inheritance tax, a new study has revealed.
The west London seat of Hayes and Harlington held by Labour MP John McDonnell, who was shadow chancellor under Jeremy Corbyn, was identified as the most anti-wealth tax constituency in the UK.
Only a third of Labour supporters think inheritance tax – which is levied on estates at 40pc on assets over £325,000 – is fair, according to a survey of almost 3,500 voters carried out in October of last year. By comparison two thirds thought income tax and National Insurance were fair, suggesting respondents preferred to be taxed on income rather than by wealth.
The findings come as Sir Keir Starmer, the Labour leader, faces pressure from his MPs and campaigners to introduce wealth taxes should his party win the next election.
Professor Ben Ansell, of Oxford University, who carried out the research, said the findings showed “a striking distaste for taxation on inheritance” across the political spectrum.
Mr Ansell ran three polls between 2021 and 2022, with 10,165 respondents in total. By matching the demographic data from respondents to the demographic data at the constituency level, he revealed which constituencies have the highest and lowest level of support.
Other Labour constituencies that were markedly against the 40pc tax included Dagenham, the constituency of Labour MP Jon Cruddas, as well as Alyn Deeside in Wales, held by Labour MP Mark Tami.
Living in London, where property prices are highest, made it far more likely that a voter would disagree with wealth taxation, the research found.
Those with the highest support for wealth taxes were based in parts of the north of England and Scotland where property price growth has been far less extreme.
Professor Ansell warned any politician planning to raise inheritance tax would run into strong resistance from voters.
He said: "I doubt raising inheritance tax could survive a political debate – not least because there is no inheritance tax in Australia, Canada, New Zealand or even Sweden."
Sean McCann, of the financial advice firm NFU Mutual, said inheritance tax was previously “feared by many and paid by few”, but said frozen tax thresholds and rising house prices meant a growing number of bereaved families were being “caught in the net”.
Official figures in January showed the Treasury is on course to collect record sums from death duties this tax year. Bereaved relatives paid £5.2bn in IHT between April and December 2022, £700m more than in the same period in the year before, according to HM Revenue & Customs.
Revenue from IHT in 2022-23 is almost certain to surpass the record £61.bn raised in 2021-22 once the data for the remaining months of the tax year is collected.
Everyone has a IHT allowance of £325,000 and a £175,000 allowance where a family home is being passed on to children or grandchildren. That means a couple can generally pass on £1m free of IHT.