£100bn wealth tax on the middle class

Inheritance and capital gains receipts to soar

TAXES on wealth will cost households £100bn over the next six years in a huge windfall for the Treasury.

The amount families will pay in inheritance and capital gains tax is set to soar as the Government pummels the middle class, Budget documents show.

The bills spell misery for millions of Britons who have invested their savings in property, the stock market and other assets.

The raid comes as the total tax burden facing British families hits its highest level for nearly 50 years. Figures buried in the Budget documents show the Treasury will collect taxes worth 34.6pc of national income this year, the most since 1969-70.

Mark Littlewood, director general of the Institute of Economic Affairs thinktank, said: ‘The UK needs policies that will accelerate recovery – lowering taxation and cutting regulation – to stand us in good stead as we leave the European Union.’ Figures from the Office for Budget Responsibility show that the Treasury earned £13bn from capital gains and inheritance tax in 2017-18.

But by 2023-24 it will make £19.4bn, a rise of 49pc.

John O’Connell, chief executive of the Taxpayers’ Alliance, said: ‘There was much good news for taxpayers, but the longer term picture still looks burdensome. The tax burden is already at a 49year high so bigger bills in the future for capital gains tax and inheritance tax suggest that the middle classes will be raided to pay for higher spending today.

‘As we leave the EU we should announce a full- scale review of the tax system to make the UK more competitive and send a signal that aspiration is a good thing, not something to be punished.’ Critics have argued inheritance tax is increasingly becoming a tax on the middle class.

Under the current rules, estates up to £325,000 can be passed on without paying inheritance tax.

There is a levy of 40pc above that threshold. For married couples the threshold is £650,000.

Figures show inheritance tax raised £5.2bn last year. This is expected to be £6.9bn in 2023-24.

Between this year and 2023-24, families face a total inheritance tax bill of £36.7bn.

The OBR figures also show that HMRC’s annual capital gains tax takings will increase from £7.8bn last year to £12.5bn in 2023-24, an increase of 60pc.

The Treasury will rake in £36.7bn over the next six years from the levy, paid on profits made when an asset, such as a holiday home or shares, is sold.

A Treasury spokesman said: ‘At this Budget we’ve cut income tax for 32m people and a typical higher-rate taxpayer will be £495 better off from April 2019. We have increased the exemption threshold for capital gains tax meaning people pay less and are freezing fuel duty and duty for beer, cider and spirits.’