‘Death tax’ fury as bereaved hit with £4.7bn bill
PRESSURE for inheritance tax to be abolished increased last night after new figures revealed a 20 per cent rise last year in the amount the bereaved were forced to hand over.
According to official figures £4.7billion was collected in 2015/16, up from £3.8billion the year before.
The rise in the “death tax” take was the biggest in five years, despite modest reforms.
The Daily Express is crusading to end inheritance tax and allow people to pass on their hard-earned savings to their children.
According to investment specialists Hargreaves Lansdown the booming housing market has played a key role in increasing the amount of “death tax” being paid, as rising property values mean many quite ordinary people are leaving substantial wealth when they die in the form of bricks and mortar.
It said the percentage of property as an overall proportion of each taxed estate is rising, particularly in London and the South-east but also in large parts of the North of England and Midlands.
The company, which provides advice on legally avoiding inheritance tax, has pointed out that in 2012/13, 17,917 estates paid an average £175,000 of inheritance tax while only 3.1 per cent of those who died left enough for their relatives to be dragged into paying the levy.
In the same year 1,558 estates benefited from a reduced 36 per cent tax rate on offer if 10 per cent of the taxable estate was left to registered charities, reducing tax liabilities by £27million.
The number of estates benefiting from this tax break is expected to have increased for 2013/14.
Other improvements to the tax rate which begin next April include a new threshold of £325,000 before duties are paid and an exemption from the tax for people’s main residences. This will provide couples with the potential to pass on death tax free estates of up to £1million in value.
But campaigners have said that the changed rates are not enough and inheritance tax needs to go altogether.
Ukip has been an outspoken supporter of the Daily Express crusade.
Nigel Farage, who is stepping down as party leader after helping persuade Britain to reject the EU, has renewed his calls for the tax to be abolished.
He pointed out that many people now make plans to legally avoid paying it.
“Given what’s happened to property prices and everything else, I don’t think this tax works anymore,” he said.
Last night he added: “I am still strongly opposed to inheritance tax. I am opposed to all forms of double taxation.
“This is money people have earned and paid their taxes on already and it should not be taxed again.”
The unpopularity of inheritance tax has been a toxic issue for politicians.
When George Osborne announced Tory plans to cut it in October 2007 he was widely credited with scaring then Labour Prime Minister Gordon Brown out of calling a snap election the following spring he looked likely to win, subsequently contributing to his defeat in 2010.