Labour has been left free to raid everything you’ve ever worked for
Some people just cannot understand why inheritance tax consistently polls as Britain’s most hated tax. They say that it shouldn’t bother most of us because relatively few estates end up having to pay it.
But, as Rachel Reeves has now helpfully proven, inheritance tax is simply a distasteful tax, and one that is now growing increasingly damaging and ineffective every year.
The Chancellor, when unleashing the death tax on family farms and pensions in her Budget last month, pointedly said that just 6pc of deaths trigger an inheritance tax bill. The phrase “lies, damned lies, and statistics” comes to mind.
Our special report details how the death tax will now affect many, many more than Ms Reeves implied.
Labour has now extended the Tory deep freeze on inheritance tax thresholds which means more of us will end up paying death duties.
Indeed, our analysis shows that by the end of the decade, close to two million relatives will have lost out to the tax – six times the number official forecasts suggest will be affected.
And this analysis does not even touch on the number of families who have to seek financial advice in retirement to avoid their loved ones needlessly paying the tax.
The truth is that many millions of families are now at risk of having to pay the charge on modest pensions and property accumulated over a lifetime.
It is now clear that the Conservatives should have abolished inheritance tax when they had the chance. Now Labour has got its hands on it and will use it to redistribute wealth as it sees fit.
Those who support inheritance tax are typically in favour of the principle rather than the legislation which is now easily sidestepped – leaving death duties to be paid only by the families of the unprepared rather than the rich who can afford it.
When Britain’s death duties were introduced in 1894, the rates were between 1pc and 8pc. Now, families are paying 40pc.
The system is also broken. Relatives are being told to clear debts on an inheritance before they can even get their hands on it, and if they can’t they face hefty interest charges.
We have seen inheritance tax abused by those in power, and manipulated and levied by opportunists in government who need to find more money to cover for their own wastefulness.
Conservative party leader, Kemi Badenoch, has already promised to reverse the tax on family farms when Labour is inevitably booted out of government.
But she should go further and abolish the tax outright for all of us.
After a few months of power, it is already clear that Labour cannot be trusted to ensure inheritance tax is levied fairly and effectively, without causing adverse consequences for the whole country.
For too long, the death duty has been played with by politicians looking to win votes or quickly raise cash. The Tories allowed inheritance tax to gradually encroach on the middle classes by freezing the thresholds for so long.
Now Labour has been left free to raid everything you’ve ever worked for. It cannot be allowed to happen again.