Labour set to launch tax raid with 'only middle class UK households hit'
Rachel Reeves has been warned a inheritance tax raid is a major 'error' as only the middle class will be hit. The new Labour Party Chancellor has been urgently warned over launching an inheritance tax raid amid the ongoing Cost of Living crisis.
Ahead of her Autumn Budget on October 30, the Labour MP is reportedly considering changes to inheritance tax that could impact middle-class homeowners, experts warn. But wealth advisers caution that such moves could unfairly target average families whilst raising minimal revenue.
Tim Stovold of Moore Kingston Smith described inheritance tax as "desperately unpopular" and "not well-directed". These potential alterations come as part of what's been described as "the biggest tax raid in history" planned for the October 30 Budget.
READ MORE New pay-per-mile car tax bands mean male drivers charged £20 more
Critics argue that simply lowering the IHT threshold without addressing wider complexities would be "lazy policymaking" and a "tax grab" with far-reaching consequences for families. Stovold said: "The super-wealthy who can afford armies of wealth advisers can wrap up assets in trusts. It will probably be politically motivated rather than a revenue raiser.
"Labour may choose, for example, to apply a 50 per cent levy on larger estates, but people with this level of wealth will plan around it. In terms of raising revenue, it’s almost a rounding error. Even squeezing the pips with substantial reform won’t raise much more."
Sir Iain Duncan-Smith told The Independent the tax would "punish ordinary people who have worked hard". Jason Hollands of Evelyn Partners also warned that changes could drag more middle-earners into paying the tax. He said this weekend: "It's the heirs who are often not wealthy who get clobbered by the tax."
Dan Neidle, tax expert, warned "even when people are told that the tax largely affects millionaires, they still hate it" ahead of the October 30 speech next week.